The year 2025 has brought a flurry of positive forecasts for the UK property market. In 2023, homeowners and new investors may have noticed a dip in house prices, but by the end of 2024, mortgage approvals and transaction volumes were on the rise. Naturally, those new to the property scene may have reservations about investing in the current economic climate. So, to answer the question: Is property a good investment in 2025? — read on to find out.

Is Property A Good Investment?

Real estate continues to be a cornerstone of major economic activity across the UK. Strong housing demand and an increasing number of first-time home buyers have led to a slight rise in home prices, particularly since interest rates were cut. This has helped drive economic activity well into 2025.

Still unsure if property is a good investment in the current market? Here are a few reasons why it might be:

• Inflation Rates: The UK’s inflation rate currently stands at 4.1%, putting pressure on the Bank of England to reduce interest rates further to support first-time buyers entering the market. More rate cuts are expected, offering some breathing space for property investors — especially first-time home buyers in the UK. 
• Government Reforms: The return of a new government has brought a wave of reforms that could give the property market a significant boost. Key changes to planning regulations have been announced, alongside a pledge to deliver 1.5 million new homes during this parliamentary term. The Planning and Infrastructure Bill aims to simplify local decision-making and streamline the consent process. Meanwhile, the Leasehold and Commonhold Reform Bill, expected in the second half of 2025, will give homeowners greater control over budgeting and management decisions. With these promising reforms and upcoming regulations, property is certainly worth considering as an investment.
• Mortgage Rate Reductions: Although the lending environment remains somewhat challenging, economists predict a continued decline in interest rates. If this happens, it’s likely to spark a rise in mortgage applications, offering investors greater leverage in 2025.

Should Property Investors Be Concerned With Trump’s Tariffs?

A ten per cent duty on goods from the UK was imposed in early 2025 by the US government under Trump. Property buyers and investors in the UK are concerned about the ripple effects that these tariffs might unleash, considering how intertwined the global markets are today. Well, the good thing is borrowers do not need to worry.

Trump’s tariffs gave way to cheaper mortgages, thanks to the Bank of England cutting down interest rates for new loans and even remortgages. It may not be much, but it still gives homeowners a chance to refinance or reinvest without burning a hole in their pockets.

Is property a good investment in the current market with tariffs from the US? Well, with better mortgage deals on the table, there has never been a better time in the last five years.

With improved mortgage availability, there will be increased activity from buyers as well, since investment opportunities always follow the path of affordable mortgages. Unfortunately, some homeowners and property investors may be a bit hesitant to get back in the saddle, so to speak.

On the plus side, due to the housing shortage that was prevalent in the last few years, a rise in demand — due to fewer mortgage rates — and a strong supply, thanks to the increasing number of homes in the market, will keep prices growing steadily in the coming years.

But all of that depends on how sustained the current cut in mortgage rates is. It is a good idea to stay informed by keeping up to date with the news from the Bank of England or trusted property investment advisers like us, or maybe consider refinancing. Many homeowners can expect substantial savings by refinancing with the current drop in mortgage rates. Better yet, consult a mortgage broker to get that professional outlook on the current turn of events in the real estate market.

What’s On The Horizon For The Real Estate Markets In The UK

Is property a good investment today? Understanding what’s on the horizon for the UK’s property markets can help with that question. Housing activity levels are on the rise, and people in the UK are hopeful about the country’s real estate and property markets for the year 2025.

With the government reforms targeting new houses annually, and the Bank of England looking to keep mortgage rates at around 4.25%, investors are willing to take the risk as all the trends expected seem positive.

Still have doubts about properties or have no idea where to start? You can contact us at Global Phoenix Group, where our experts are willing to guide you to make your first purchase or secure a strong mortgage for your property.