It’s a new year and this is the perfect time for new beginnings. This is especially true in the property market which is at the start of a new cycle following an extremely positive year in 2024.
Whether you are a homebuyer or an investor, a range of factors have come together to make 2025 a great time to buy UK property – and the earlier you do it, the better.
House prices are rising
The year began with the news that house prices are rising. The latest House Price Index from Nationwide confirms that house price growth ended last year on a high.
Overall, prices went up 0.7% in December, and 4.7% year-on-year, with some of the highest growth seen in the North of England.
This followed a 1.2% increase in November, demonstrating consistent growth in house prices during a period that is often considered more challenging and slower for the market.
Robert Gardner, Chief Economist at Nationwide, said: “Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers.
“As a result, it was encouraging that activity levels in the housing market increased over the course of 2024 with the number of mortgages approved for house purchase each month rising above pre-pandemic levels towards the end of the year.”
New data from Zoopla further adds to the good news and confirms what Nationwide reported.
The property portal’s information shows that buyer demand has increased by 21% in the last year. Lower mortgage rates and the improved economic situation has brought more people into the market and fuelled a sustained recovery in the housing market over 2024.
Richard Donnell, Executive Director of Research at Zoopla, said: "Sales market activity has rebounded over 2024 as buyers and sellers return to the market. This has boosted sales volumes.”
Low construction rates set to continue
The growing demand for homes is further intensified by a limited supply. While more properties are entering the market, the overall housing stock in the UK remains insufficient to meet the high level of demand.
The supply and demand imbalance is the foundation of the housing market’s growth – and it effects both owner-occupiers and renters alike.
The government’s new target of 1.5 million homes by the end of this Parliament in 2029 is ambitious, but unrealistic.
New home completions keep falling, as does the number of new starts on site.
Even if they did manage to get that many homes built, it still wouldn’t meet demand. For example, the Centre of Cities estimates that more than 600,000 homes would be needed each year to meet demand by the end of the decade.
A good example of how this works in practice can be seen by looking at Manchester.
According to the latest Deloitte Crane Survey, 11,765 homes are currently under construction in the city and are expected to be completed within the next three years. However, data from the City Council reveals that the city center's population alone has grown by 40,000 over the past five years, with further growth anticipated in the coming years.
That makes any property within easy reach of Manchester city centre property for sale – such as Uptown – an extremely valuable commodity for both homeowners and investors.
That makes 2025 an ideal time to buy UK property for sale and maximise your returns through capital appreciation.
Future house price growth
How much might those returns be in the future? We are at the start of a new property cycle and the forecasts show that property owners can expect high capital appreciation in the future.
Projections from different analysts vary, but the latest prediction from JLL still says that house prices will go up by 20% by the end of 2029.
Furthermore, Savills has estimated an average growth of 23.4% across the UK over the same time span.
In fact, Savills believes that regions like the North West (29.4%), Yorkshire and the Humber (28.3%) and the West Midlands (26.4%) will see even higher growth – showing anyone interested in capital appreciation where they should look to buy.
Rents will also continue to rise
On top of that, investors can also look forward to growing rents over the next four years. Having reached historic highs over the past few years, the pace of growth is not likely to be as quick.
However, growing from a historic high means that you will still be achieving record rents each year if you choose the right investment location.
Both JLL and Savills agree that the average UK rent outside of London will increase by more than 17% by the end of 2029. That makes it an ideal time to buy.
Using Manchester as an example, rental prices are projected to increase by over 17% on top of their current levels. According to the Office for National Statistics, the average monthly rent in the city is £1,279—an 11.4% year-on-year increase.
2025 is the best time to buy
All of this means that 2025 is the best time to purchase UK property for anyone interested in maximising their returns, whether that is capital appreciation, rental income or both.
In fact, the earlier in 2025 you buy, the better. Prices are on the up, so earlier purchases will be cheaper – and you will also earn higher returns.
That’s especially true if you buy off-plan property for sale which will give you a below-market rate today and allow you to pay with lower mortgage rates in the future.
Whatever property you choose to buy, 2025 is the ideal time to buy property and make the most of the new property cycle.
Want to learn more about the opportunities available on the UK property market? Get in touch with the team today and discover how we can help you find the perfect property.
