The stock markets have been affected by global economic uncertainty and left many wondering if there is a better place to keep and grow their money. UK property offers a reliable alternative for investors from around the world in 2025.
Uncertainty can be an opportunity if you are proactive. Here are just some of the reasons why 2025 is a good year to invest in UK property and make the most of the opportunity at hand.
House prices are rising
2025 is the start of a new house price cycle following two tough years. The recent economic uncertainty hasn’t changed that. Office for National Statistics data released in May 2025 shows that the average house price in the UK has increased 6.4% in the last 12 months.
That’s compared to annual growth of 5.4% reported last month, showing that house price growth is accelerating. That’s a result of overwhelming demand for homes. The government is aiming to build approximately 350,000 new homes a year, but there is a backlog of millions.
Because of this, Savills expects the average UK house price to go up by more than 23% in the next four years - showing that 2025 is a good time to buy UK property.
Where is house price growth fastest in the UK?
The best property investment locations in the UK are the big regional markets like the North West, the West Midlands, the South West and Yorkshire.
For example, the Office for National Statistics reports that the average house price in the North West went up by 8% last year – more than 2.5% faster than the national average. In contrast, annual growth in London was just 1.7%.
That regional advantage will become even clearer in the future. According to Savills, house prices will increase over the next four years by:
- UK – 23.4%
- North West – 29.4%
- Yorkshire and the Humber – 28.2%
- West Midlands – 26.4%
- London – 17.4%
That makes it clear where investors should put their money in 2025 to maximise returns over the rest of the decade.
Rents are also increasing fast
Rents are also going up fast in 2025. The ONS reports a national average rental increase of 7.7% in the year to March 2025. Furthermore, Zoopla analysis confirms that rental demand remains at extremely high levels – 12 people are competing for each home on the market on average across the UK.
More good news is coming in the future for investors, too. JLL says: “Lack of supply and more competitive mortgage rates are expected to underpin growth in prices over the next five years. Rental growth is expected to exceed inflation and wages over the five-year forecast period, but an increase in activity in the sales market means rental growth is expected to lag price growth, with rents forecast to be 17% higher by the end of 2029.”
That makes 2025 a good time to invest from the perspective of rents as well as house price growth. Add the two together and you have a recipe for high returns.
Falling mortgage costs
It’s no secret that mortgage costs have been higher than anticipated in the UK over the last three years. However, they are now coming down as the Bank of England cuts the base rate of interest – and brings the cost of borrowing down with it.
Multiple cuts to the base rate have been announced in the las nine months, and the average cost of a mortgage has dipped below 5% again in response.
Even better news is that more cuts are anticipated over the rest of 2025. Inflation is falling and the market is now convinced there will be at least two more reductions – and possibly three – by the end of the year. Speculation is that the base rate will fall to at least 3.75% as a result.
Most of that drop will have already been ‘priced in’ by lenders, meaning we can expect further reductions in the cost of mortgage products towards the end of the year. In the future, that cost is likely to keep falling.
Is 2025 a good year to buy off-plan property?
All of that makes off-plan property for sale a good choice for investors and homebuyers alike:
- Property prices are going up
- Rents are going up
- Mortgage costs are going down
Those are key factors that apply to any investment made in 2025. If you buy off-plan, you can benefit even further:
- Buy at today’s price
- Enjoy capital appreciation over the build period
- Pay in the future when mortgage rates are lower
- Earn instant equity on completion
- If you are an investor, instantly benefit from higher future rental rates
2025 is a good time to buy UK property
Buyers should be extremely positive about UK property in 2025. The market is strong and growing, supply is low and demand is high.
At a time of global economic uncertainty, UK property represents a reliable, profitable option whether you are an investor or owner-occupier. Certainty is priceless, and UK property offers that.
Want to learn more about the UK property market? Get in touch with our team of experts today for more information.
