How 2025 was the year of growth for UK property

The UK property market has proven its resilience in 2025. The year has seen major economic challenges, including cost-of-living increases and the impact of international economic factors like tariffs and volatile energy pricing.

However, the housing market has remained stable. That has led to a year of growth for UK property, and house prices are close to the all-time highs seen in 2022, according to Nationwide.

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Inflation has peaked, and interest rates are falling

The UK’s headline rate of inflation is falling. After reaching heights of more than 10% in 2022, Consumer Price Index inflation is now at 3.6% as of October 2025. That means inflation is past its peak, and we saw the property implications of that in 2025.

First, it allowed the Bank of England to decrease the base rate of interest. There were four cuts over the year, which reduced the rate from 4.75% to 3.75%.  Second, these cuts reduced the price of mortgages, which brought more potential buyers into the market, both owner-occupiers and investors.

Increased demand meant that growth returned to the market.

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Property value growth in 2025

Data from the Office for National Statistics shows the impact of this demand. The average UK property value in the UK has increased by 2.6% in the last 12 months, with some markets like Manchester (3.5%) and Liverpool (9.2%) outperforming the rest of the country.

Similarly, the average rent in the UK has increased by 5% in the last year, delivering even greater benefits to landlords.

When examined in more detail, there is also a clear trend showing where property values are rising the fastest. Research from Zoopla in November 2025 shows prices in the South of England may have actually dipped in Q4 2025. In contrast, values rose faster than average in the North of England – showing exactly where the most substantial growth is occurring.

All indications show this trend will continue in 2026, and this should inform investment plans.

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Looking ahead to further growth in 2026

2026 looks to be another strong year for UK property. Interest rates have been cut numerous times in 2025 and are likely to fall further in the New Year, and the British Chambers of Commerce anticipates inflation will fall to 2.1% by the end of 2026. This has raised expectations for improved affordability and increased buyer demand in the next 12 months.

In turn, house prices are expected to rise further. Rob Gardner, chief economist at Nationwide, said: “We expect housing market activity to strengthen a little further as affordability improves gradually (as it has been in recent quarters) via income growth outpacing house price growth and a further modest decline in interest rates.

“We expect annual house price growth to remain broadly in the 2 to 4% range next year.”

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How to get ahead in property in 2026

We ended the year with updated forecasts from Savills, which show the 2025 year of growth is just the start for UK property. Average growth from 2026-2030 will see an additional 22.2% of value added to house prices in the UK. The regional highlights show where growth will be even faster:

• Yorkshire and the Humber – 28.8%
• North West – 27.6%
• West Midlands – 24.6%

That makes 2026 the ideal time to build on a strong 2025. Investors have an opportunity to invest at the very beginning of the new property cycle and earn the maximum return on investment possible in the next four years by moving fast in the New Year.

Want to discover the UK’s best buy-to-let property opportunities?

‍See our available UK investment property for sale today and contact the team to start planning for the New Year!