As we move into 2025, the UK property market is poised for steady growth after a year of adjustment in 2024. Despite challenges from rising interest rates and the cost-of-living crisis, savvy investors found key opportunities, particularly in off-plan developments and regional cities.

Interest rates will continue to be a critical factor in 2025. After the Bank of England’s cautious stance in 2024, rates are expected to gradually decline, with many predicting a mid-year rate of around 4%. This reduction will provide relief for buyers and investors, stimulating activity, especially in the second half of the year.

With improved affordability and sustained demand, 2025 is likely to see price growth across most markets. Savills forecasts a 23.4% average price increase over the next five years, boosting investor confidence. Regional cities and commuter towns are expected to outperform the capital, with growth rates of 3-5%, while London may see slower growth of 1-2% due to ongoing affordability issues.

First-time buyers, priced out in recent years, are also set to re-enter the market as affordability improves—a trend already visible in our marketing enquiries.

Sustainability is another key trend. Energy-efficient homes and retrofitting existing properties to meet environmental standards are gaining momentum, driven by both government incentives and rising energy costs. Investors and tenants are prioritising Energy Performance Certificates (EPCs), and the demand for eco-friendly properties is only set to grow.

The rise of smart home technology will also be a defining feature in 2025. Developments offering tech-enabled solutions, such as app-controlled heating and co-living spaces with shared amenities, will attract a tech-savvy tenant base.

Overall, 2024 laid the foundation for stabilisation, and 2025 looks set for steady, sustainable growth. Whether you’re an investor, first-time buyer, or developer, opportunities abound for those ready to act. In a market where slow and steady often wins the race, confidence is key.

Source: Buy Association Group edited by Perry Brown for readability.