UK house prices are on a high and are expected to keep growing

January 22, 2025

There’s no doubt about the strength of the residential UK property market. House price growth was at 4.7% year-on-year by the end of 2024 according to Nationwide, and there’s room for much more growth in the future.

Mortgages became more affordable thanks to the Bank of England cutting the base rate of interest, and buyer confidence soared.

Zoopla’s December 2024 UK House Price Index showed:

21% increase in buyer demand
23% increase in sales agreed
18% increase in new homes on the market
10% growth in the overall stock of homes for sale

And that was all before the traditional January rush.

In our 2025 market predictions, we forecasted a positive year for homeowners and investors alike. Conditions were right for further house price and rental growth. Low construction rates, high demand and a shortage of availability all point to 2025 being the perfect time to buy UK property and maximise your returns.

Now, the first data from the new year is being published and it is clear that the market is exceeding expectations. Growth is even faster than expected.

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The UK housing market is growing

Rightmove reports that a record number of people have put their homes on the market in January 2025. An 11% increase compared to last January gives us the highest level of market activity at the start of a year since 2015.

Even better for homeowners and investors, house prices are rising at the same time.

The same Rightmove report shows that the average price of new properties coming to market has increased by 1.7% this month. That’s the largest jump in prices at the start of a year since 2020 and shows that the market is full of confidence.

Matt Smith, mortgages expert at Rightmove, said: “As we step into 2025, the housing market is already showing signs of robust activity, with demand from buyers increasing year on year. This growth is fuelled by a combination of economic stability, renewed consumer confidence, and slightly more favourable lending conditions.

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Will the momentum continue?

The greater number of properties on the market means that competition for the best homes will inevitably increase. That extra availability is great for owner-occupiers and investors looking to buy as they can pick out the ideal homes.

However, it’s also good for sellers as it means that if they have an exceptional property on offer, they are more likely to see a bidding war develop. That could lead to higher sales prices and increased capital appreciation.

That’s especially the case given that mortgage affordability has improved and people are more comfortable upping their bids. But it raises the question of whether that momentum can be sustained.

Further cuts to the base rate of interest by the Bank of England Monetary Policy Committee are likely to be key to that. Doing so will require inflation to fall further – which is exactly what happened in January 2025.

A cut in February is viewed as a near certainty, and there is speculation that a further two cuts will be agreed upon over the rest of the year at a minimum. That will make mortgages even more affordable and may be the push needed to keep the housing market momentum going over 2025 and beyond.

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Where to buy UK property?

With that in mind, all indications are that this is a great time to look at UK investment property for sale and get ahead of the market.

Finding the right property is key, with the following factors vital for anyone looking to expand their portfolio and maximise their profits in the years to come:

If you can find a property that meets all those criteria, you are going to be in a prime position to benefit from the house price growth that is coming over the rest of 2025.

Want to learn more about the UK market and discover the best UK investment property opportunities for 2025? Enquire today and our team of expert advisors will be able to help you find the perfect investment!

UK house prices are on a high and are expected to keep growing

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