What’s next for the UK property market? Trends to watch in 2025 and beyond

What’s driving the slowdown in house prices?

We started the year forecasting that house prices would go up by 2%, which was on the lower side of what others were predicting. Now, we think house price growth will be closer to 1% by the end of 2025, and we expect this slower pace to continue into 2026. 

Higher mortgage rates and more supply are the main reasons why growth has slowed. But, slow house price growth isn’t necessarily bad, as long as people still feel confident enough to sell and buy. 

Highlighting the current strength in buyer demand can be key to winning that instruction, while the vast amount of choice available in the market is an important point for re-engaging buyers.

Get more market insights from our House Price Index, to help you win in the living room.

The property market in 10 years

Looking further ahead, we expect that house prices will grow roughly at the same rate over the next decade, so 2-3% a year.

With higher mortgage rates across the market, affordability remains a barrier to large price gains in southern England, with room for growth in more affordable markets across the rest of the country.

Mortgage rates remain stable

Average mortgage rates are likely to remain relatively stable around 4% over the next 12 months, with some in the high 3% range. Changes to the mortgage stress-test rules have meant that buyers using a mortgage can borrow up to 20% more than they could just three months ago - for the same household income and mortgage rate. 

This is good news for the property market and those hoping to buy, even though rates haven’t fallen more. It’s also a great opportunity to re-engage buyers who had previously dropped off the market, and make sure they're aware of these changes. Make sure you’re keeping up to date with the latest base rate updates, and how they can impact your business.

Is Labour’s 1.5m homebuilding target realistic?

It’s unlikely we will build 1.5m homes over this Parliament, but there is a chance we get to a run rate of 1.5m by the end of the Parliament. Planning reforms and more money is great news, but builders are concerned about the demand for homes and are pushing for a return of an equity loan scheme, similar to Help to Buy. 

We’re only going to build more homes if we build a range of tenures and price points to enable more buyers to buy and to get more homes for rent - both private and social.

Affordability still remains a challenge

The affordability of housing is a big problem for both buyers and renters. It’s harder to buy homes, which limits access for first-time buyers. This has created an even greater demand for rented homes, pushing rents higher. We have to improve affordability, and the only long term solution is by building many more homes to buy and rent.

The biggest threat to house prices

History shows that rising unemployment is the biggest risk to house prices. Fear of unemployment weakens demand, causing house prices to fall. While mortgage rates more than doubled between 2021 and 2023, the impact on prices was relatively modest. 

Homeowners and buyers shouldn’t expect the high levels of annual house price inflation we have seen in the past. While prices will keep rising, the increase will be in the low single digits.

The big shift in the landlord sector

There are more than 2 million private landlords owning property in the UK, and they’re providing much-needed rented housing. Being a landlord was almost too easy in the 2000s, and the Government changed tax relief to limit the competition with first-time buyers. This slowed investment and limited growth in supply, which was one reason there has been a rapid increase in rents over the last 3 years. 

One big change is that half of all rented homes are owned by the 20% of landlords with more than 5 homes - the landlord sector has professionalised which can only be a good thing. The focus for most is providing good homes for rent over the long term. 

With this new demographic of landlords, it's vital that letting agents adjust their outreach and onboarding strategies to match. Managing multiple properties is no easy feat and the right letting agent can make a tangible difference to a landlord's bottom line. With our Featured Listing and Premium Listing products, and detailed data on the rental market, you can showcase to landlords exactly how you can find the right tenant for their property.