As 2024 comes to a close, the UK property market has demonstrated resilience, defying initial forecasts to deliver strong returns. From rising house prices to booming rental demand, the property market continues to attract homeowners and buy-to-let investors, setting the stage for growth in the years ahead. Here’s a look at how the UK property market performed this year and why it may offer valuable opportunities for investors in 2025.
Rising House Prices
Against expectations of a potential decline, UK property market values rose by 1.6% this year. Experts now predict a potential 21.6% growth over the next four years, highlighting the start of a promising new property cycle. This forecast makes a strong case for investors considering entry or expansion in the property market.
Lower Interest Rates & Affordable Mortgages
With inflation returning to around 2%, interest rates have been cut to 4.75%, creating one of the most affordable borrowing environments in over a year. Sub-4% mortgage rates are now available, opening doors for both new and seasoned investors. This affordable borrowing environment is likely to drive further activity in the UK property market, making now an ideal time to secure a favourable rate.
Increased Market Activity
Buyer demand in the UK property market surged by 26% this year, with sales agreements jumping by 25%. Lower borrowing costs have contributed to this renewed activity, resulting in a particularly busy autumn season. This level of interest in the property market suggests strong momentum heading into 2025, where demand is expected to stay high.
Booming Rental Demand
The rental segment of the UK property market continues to see robust growth, with UK rents rising by 8.5% in 2024 alone. An increasing number of households are choosing long-term rentals, maintaining high demand for rental properties and generating solid returns for landlords. This trend is especially relevant for buy-to-let investors, who stand to benefit from the rental market’s sustained growth.
What Does This Mean for the UK Property Market in 2025 and Beyond?
Looking ahead to 2025, the UK property market’s outlook remains strong, with demand outstripping supply. The continued housing shortage and forecasted property value increases offer a favourable landscape for long-term property investments. Investors can expect positive returns as house prices rise and rental demand stays high.
Considering Your Next Move?
If you’re thinking about expanding your property portfolio or making your first investment, the current state of the UK property market makes it an opportune time. Reach out for a free consultation, and let’s explore how you can benefit from this resilient and dynamic market.
