MARKET UPDATE
UK property market update for february 2025
February 10, 2025 • Author: Richard Bradstock
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Whilst the world rides a geopolitical rollercoaster there’s a lot to be said for a steady and safe pair of hands. And folks, this is what the UK property market offers you right now. Safe, steady and unremarkable news; the kind of comfort you get from a meal at your mother’s table, a reassurance that somewhere in the world it is business as usual, that everything is going to be just fine. So, if you’re looking for less drama and more of a constant keel in your life – let the UK property market be your safe place.
What happened in the UK market in February?
UK House Price Growth Report (2024-2025)
Growth! Growth happened. Like the crocuses breaching the frozen winter ground, UK house prices grew six months in a row in February according to Nationwide, the UK’s largest mortgage provider. Prices rose by 0.4% up from 0.1% the previous month, making the annual rate of growth between February 2024-2025 3.9%; considerably more than any agency predicted at the beginning of 2024. Savills are now forecasting a 4% rise in average house prices in 2025.
Yes, but the sceptical may say amongst you, isn’t there a sunny stat for everything? Well, no actually not here at RPA. We like to give you the real lowdown and February’s data is to be celebrated. Average UK house prices declined from mid-2023 to spring 2024 and the Nationwide index is regarded as one of the earliest measures of movement in the UK housing market, more so than Halifax and Land Registry Data. Why? Because, it’s more timely, using data from mortgage approvals rather than completed sales data therefore provides a great indicator of what’s to come.
Nationwide’s data focuses more on owner occupied homes and thus presents a typical view of the health of the residential market which underpins the strength of the buy-to-let market. The level of owner-occupied activity in a housing market is the key driver of long-term organic growth as opposed to investor speculation.
And this is what the latest data from Nationwide is suggesting; more owner-occupier activity meaning more potential for solid long-term growth. We can also tally this with other data; the volume of property listings in January was fifth higher than the five-year average. Buyers are coming back into the market. We are at the beginning of the next house price cycle.
How home ownership underpins the UK property market for investors
A word of warning to investors; do not underestimate the importance of the housing market when it comes to British culture. The health of the nation’s housing market does not exist in its own bubble, but is intricately linked to the health and happiness of the nation. A great indicator of how much time Brit’s spend obsessing about housing is to learn that Rightmove is one of the UK’s top four websites. Yes, top four, behind the BBC, a newspaper group and gov.uk.
This is how much home ownership is wedded to British culture. People spent 16.4 billion minutes searching property on Rightmove in 2024. And although it appears the UK is tipping into a nation of renters, home ownership is very much still the goal and aspiration. And it is this continued demand from this demographic which underpins the long-term viability of any property investment, no matter what country you buy in.
On the heels of the 16.4 billion minutes spent on Rightmove revelation, perhaps now is a good moment to humbly plug the value of our service. Buying UK property through RPA saves you from the black void that is the scroll hole.
We bring our clients the best UK property investments in the most desirable locations – no doom scrolling on property portals necessary, freeing up your time for more important things, like deciding what you’re going to have for supper this evening or where you should book your next holiday.
Where should UK property investors be buying in 2025?
Other housing data released in February included that of new homes supply, showing that 2024 saw the lowest number of new homes built in a 12-month period since 2017. And where are supply shortages most acute? London, the South East and the South West, according to the graph below. In contrast, the North West and West Midlands appear to have a more balanced market in terms of their supply and demand, meaning that the stronger longer-term price gains are more to be made in London and the South East over the coming years if you’re investing now.
Large increases in delivery needed to meet new housing need figures.
Source: Savills
Outer London and Commuter Belt Showing Excellent Growth Potential
We wrote about this earlier in February, highlighting how London and areas of its commuter belt are showing excellent value along with strong future rental growth. Our bullish appetite for outer London has been further whetted with the news that Build To Rent completions were down 64% in 2024 compared to the previous year. This is the most attractive London has been to investors this side of the pandemic.
Furthermore, Knight Frank are reporting this month that demand in South West London is outstripping any other area across the capital. The number of new applicants looking for properties in that pocket of London increased by 29% this year, whereas Prime Central London has seen a decline in demand of 5%. Demand in London’s outer lying boroughs is also growing into the Home Counties, particularly Surrey, along London’s south western flank.
In the coming weeks, we’ll be launching an exclusive development of only 14 apartments in the sought after Surrey village of Claygate, bordering Esher and we expect them to sell out in days. Contact us for more information, we’ll be going to market mid-March.
For anyone who tuned into our recent webinar, Is London Back? (spoiler alert, the answer is “yes”), the capital and its outer boroughs look to be a great investment for 2025. If you missed the discussion you can listen to it here.
Finally, the Bank of England is expected to cut interest rates further in 2025. This combined with a lack of supply that is continuing to nudge up rents and buyers coming back onto the market pushing up prices means we are tinging the golden triangle here folks. London is calling you, make it your safe haven to invest in in 2025.
About The RPA Group
RPA has been advising a global client base on UK property acquisitions for over 20 years. Dedicated agents, dealing exclusively with overseas property investors, RPA source the best London and UK property investment opportunities and have helped hundreds of clients to build high-performing UK property portfolios. Our services include expert advice on property investment, mortgages & finance and Lettings & Management to give our clients the full suite of services they need to build an effective and profitable London property portfolio.
Get in touch today to see how we can help you to begin building your UK property portfolio.
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About the author
Founder & Managing Director
richard bradstock
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals.
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