2025 UK Property Market Forecast: House Prices, Rents, and Mortgage Rates

Ah, the great British property market: a national obsession right up there with queuing and complaining about the weather. For British expats looking to invest in UK property, the scene in 2025 is shaping up to be as dynamic as ever. In this forecast, we’ll dive into what’s likely to happen with house prices, rent, and mortgage rates, giving you the lay of the land for the year ahead. But keep in mind that these are based on our crystal ball, which can be tempremental from time-to-time... Here is our UK Property Market Forecast 2025.

House Prices: A Gentle Climb (No Mount Everest Here)

If you were hoping for a rollercoaster ride, you’ll be sorely disappointed—2025’s UK house prices are predicted to take the slow-and-steady approach. Nationwide forecasts a rise of 2% to 4%, driven by improved affordability, easing mortgage rates, and—of course—that persistent housing shortage. (Source: Nationwide)

In London, always the belle of the ball, prices are likely to see some action as well. The capital’s demand from foreign buyers and limited housing stock mean it could experience a bump close to 3%. As for the rest of the UK? It’s more of a sedate countryside ramble, with modest increases expected in regional hotspots like Manchester and Birmingham.

Why It Matters for Expats:

Whether you’re eyeing a flat for personal use or an investment property to rake in the rental pounds, these modest gains mean there’s still time to bag a bargain before values creep higher. There are plenty of investment properties for expats out there, but you can expect the prices to continue to rise.

Rent Prices: A Market in Balance (For Now)

After years of steady increases, rent prices are expected to plateau—or at least rise at a slower pace—in 2025. Why? Two big reasons:

1. The Renters’ Reform Bill (more on this later) promises to cap rent hikes and give tenants more rights.

2. Some landlords, spooked by stricter regulations, are considering selling up, which could slightly ease demand pressures.

That said, the ongoing imbalance between supply and demand—especially in urban centers—means tenants shouldn’t get too comfortable. Rental prices could still tick upward by around 3% to 5%, particularly in cities like Bristol, Edinburgh, and Manchester, where demand for quality rental homes remains sky-high.

Why It Matters for Expats:

If you’re planning to invest in buy-to-let properties, don’t expect rental income to shoot through the roof—but steady, reliable yields should still be on the cards. Plus, with tighter rules coming into play, picking the right property in the right location will be crucial to staying competitive.

Mortgage Rates: Light at the End of the Tunnel

After a tough few years of sky-high rates, 2025 is expected to bring some relief for borrowers. Economists predict a gradual decline in mortgage rates as inflation cools and the Bank of England eases its grip on interest rates. While we’re unlikely to return to the sub-2% deals of yesteryear (a distant dream, we know), fixed-rate mortgages could settle around the 5% mark—a nice drop from the 6%+ highs of 2023 and 2024.

However, timing will be everything. Early 2025 might still see some bumps as lenders adjust to the new norm, so keeping a close eye on the market (or working with professionals who can) will be key. If you're asking your self "How can I get a mortgage as an expat?", you need to check our previous post in the knowledge center that answers that exact question.

Why It Matters for Expats:

Cheaper borrowing costs mean it could be the perfect time to lock in a deal on a new property. But don’t wait too long—favorable conditions might spur a buying spree, increasing competition.

The Silver Lining: Opportunities for Expats

While the UK property market in 2025 may seem like a mixed bag, it’s actually brimming with opportunities for savvy British expats:

• Steady House Price Growth: Buy now, see your investment grow tomorrow.

• Rising Demand for Rentals: A stable rental market means consistent returns for landlords.

• Lower Mortgage Rates: Financing your dream property could be more affordable than in recent years.

Your Next Move: Leave It to the Experts

As an expat, navigating the UK property market can be frustrating and ineffective. But that’s where we come in. At Expat Property Investments, we specialize in helping Brits abroad tap into the UK property market with ease. Whether you’re looking to buy your first rental property or expand your portfolio, our team handles everything from property sourcing for expats to rental management for expats. Let us take care of the legwork while you enjoy your well deserved returns. Schedule a call with us here for a free 30 minute consultation.