UK Property Market 2025: Your Questions Answered

Will Property Prices Rise in 2025? 

House price indexes are provided monthly by large property businesses such as Zoopla, Rightmove and Halifax, which provide a picture of the current UK property market trends. The predicted house prices are found based on factors such as demand, affordability, and the wider market landscape. 

In the long-term house prices are predicted to continue growing, with various fluctuations throughout the year depending on events in the wider landscape. Such as inflation changes, tax rates, and wages.

Predictions show that we can expect to see a 4% rise in property prices in 2025, according to Savills. Throughout 2024, the annual house price growth was 2.5%, so 2025 is set to be a stronger year for price growth. Furthermore, Knight Frank predicts that house prices in the UK will see an overall increase of 19.3% by 2029. 

Investors in 2025 will see huge benefits as house prices are also predicted to continue rising throughout 2026 and 2027. Providing an opportunity for strong returns on investment.

Are Mortgage Rates Predicted to Come Down?

Mortgage Rates slightly increased since the 2024 Autumn Budget, however, they are still lower than the rates in 2023. With continuous inflation and base rate changes, there is likely to be many more changing predictions and analysis’ throughout the year. 

We don’t expect to see any major changes to mortgage rates in 2025. Rates are predicted to stay around the same level instead of rising. However, this is subject to change depending on other changing rates and factors that may affect the cost of borrowing. 

Will Rental Prices Rise in 2025? 

By the end of 2024, rents are predicted to have risen by around 8% compared to the same time in 2023. This is a huge growth, which isn’t sustainable for renters and this level of growth will lead to an affordability cap. However, in 2025 there is predicted to be more steady levels of growth to prevent this from happening. 

Knight Frank expects we will see a 4% rise in average rental costs. Followed by 3.5% growth in 2026, 3.5% in 2027, 3% in 2028, and 2.5% in 2029. Adding up to an overall total of 17.6% growth by 2029.

Due to the huge demand for rental properties, leading to a large surge in rental prices, renters are looking in lower-priced areas. This can create an opportunity for investors to invest in properties at a below-average price and see rental growth in the coming years. These properties are likely to provide stronger renal growth as they have more space for rental rises before reaching an affordability cap.