MARKET UPDATE
UK property market update for 2025
February 7, 2025 • Author: Richard Bradstock
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Hello and a Happy New Year to all our clients all over our world, in our first market update for 2025. Happily, this update also happens to coincide with Chinese New Year celebrations ushering in the year of the snake, which we’re delighted to report represents growth, flexibility and tolerance, all things investors might wish to court in 2025. Let’s start with growth – of which there is plenty to report.
MARKET GROWTH
Arguably the most integral property market data in the UK, Savills kicked off 2025 predicting a positive year for UK house price growth; 4% by the end of 2025 rising to an annual increase in 2026 of 5.5%. The real runaway star is Manchester buy-to-let property singled out to increase in value by almost a third by 2029.
UK House Price Growth Forecast
Legend:
| Abbreviation | Region |
|---|---|
| NW (MAN) | North West (including Manchester) |
| WM (BHM) | West Midlands (including Birmingham) |
| SE | South East |
| LDN | London |
The current culture war over hybrid working appears to be positively impacting the property market too, kickstarting the London market and that of the South East with buyers and renters seeking a return to commuter hotspots and city centres following their run for the hills during the pandemic.
Meanwhile, the new UK government has done little to ease industry concerns over the dwindling supply of new homes. A tracker released by the BBC this month shows the “immense challenge” of building 1.5million homes over the next five years, one that would require a five-fold increase in new housing targets to deliver. Terrible news for would-be homeowners, but a silver-lined cloud for investors who will capitalise on rising new building prices and a squeeze in new build supply that will be felt most in the South East.
Circling off growth, January has seen the highest rises in property prices since 2020, a rise of 1.7% in a month, the uptick in the market likely driven by the rush to complete before stamp duty rises in April. Still, growth is growth – and we’ll take it!
The current currency play – USD/AED to buy UK property
Anyone using USD/AED to invest in the UK market right now is, frankly, onto a winner. We encourage all our clients based in the UAE to contact us to discuss this further as an excellent time to take advantage of buying UK property.
Contact us to discover the margins to be gained.
Flexibility: The Key to a Balanced Property Portfolio
Yield versus capital appreciation is the million-dollar question investors always seek to navigate. We try as much in our investments to ensure both, but often both can’t be received in equal measure. With falling interest rates reducing the amount of interest on savings, if you’re getting twitchy for your savings to do more then UK buy to let property is a good option; receive regular rental income as well as the ongoing appreciation in the value of your asset.
All this to say because of a recent article in The Times which highlighted an interesting phenomenon, that often the areas with the highest rental yields don’t see the highest rises in house prices. Thus our advice to all clients is that the ideal UK property portfolio will seek to capture both, flexibility the definite buzzword for investing in 2025.
2025, a reward for investors’ tolerance?
We’ve tolerated some exceptionally bumpy times in the mortgage markets over the last three years and according to Lloyds Bank “a rate of around 4% is what we should expect as the new normal” for the next 12 months. Others remain more optimistic about a lowering of this rate, but that aside, there is a strong industry-wide consensus that 2025 will be a buyer’s year. And so without further ado, what have we got for you to buy?
Featured UK Development
sloane court
From £203,500
Summer 2026
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Located in the Jewellery Quarter, Birmingham’s fastest growing neighbourhood. Easy walking distance to central Birmingham’s retail districts and places of work .
sloane court
Completing next year in 2026 and with a very affordable entry point, we have off-plan apartments for sale in this popular development in Birmingham’s Jewellery Quarter. Compared to London and other southern cities, Birmingham offers significantly more affordable property prices.
The average house price in Birmingham is approximately 50% lower than in the capital, making it a more accessible market for investors.
In their latest forecasts, published in December, Savills predict property prices in Birmingham and the West Midlands will rise on average by 26.4% between 2025-2029. Whilst rents are forecast to increase by over 22% in the coming years reflecting strong demand and delivering attractive returns for buy-to-let investors.
Despite the lower entry cost, Birmingham delivers some of the highest rental yields in the UK, with certain postcodes offering returns of up to 7% or more. This combination of affordability and profitability is particularly appealing in the current economic climate, where investors are seeking value without compromising on returns.
Contact us today for more information and if you’re in the UAE please do get in touch about the current advantages the UK property market holds for you. We wish you a productive start to the year and look forward to bringing you more top performing UK property investments in 2025. Watch this space!
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About the author
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.
Founder & Managing Director
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