As news breaks of the steepest monthly drop in UK house prices for 20 years, many are wondering whether it is a good time to invest in property.
To help you make an informed decision, here are the factors currently affecting UK house prices and their investment value.
UK Interest Rates
The Bank of England (BoE) is poised to begin cutting rates again. As of July, economists expect a 0.25 pp cut from 4.25 % to 4 % in early August, potentially easing further before year-end.
Already, two‑year fixed mortgage rates have dropped from around 5.34 % to 4.53 %, translating into significant monthly savings for borrowers.
Why it matters: Lower mortgage rates enhance affordability, attract first‑time buyers, and encourage refinancing, fueling demand and underpinning price recovery.
Market Prices: Stability with Regional Variation
National perspective
- July saw the sharpest monthly drop in asking prices since 2002 (-1.2%), as new listings surged and sellers competed
- National price growth remains positive (+2–2.5 %)—with Halifax reporting 2.5 % annual, and Nationwide about 2.1 %
Regional nuances
- London lags, with asking prices in inner areas down ~2.1 % in July
- Northern regions (e.g. North East, Scotland, Northern Ireland) continue to show stronger annual growth (~6–9 %) thanks to better affordability Homebuilding.
Supply & Demand: Shift Toward Buyers
- Housing supply is at decade highs (+14 %), giving buyers more choice and bargaining power
• While buyer inquiries and sales remain elevated, growth has moderated. The momentum that was boosted by earlier stamp‑duty incentives is now softening
• Post‑stamp‑duty market shows price sensitivity: “buyers increasingly selective and willing to negotiate or walk away from overpriced properties”
Where Opportunity Lies
- Northern England & Scotland
Lower average prices + stronger demand = opportunity-rich markets. Regional growth is outpacing national averages - Commercial Real Estate & BTR (Build to Rent)
CBRE forecasts a commercial price trough in 2024, turning to growth in 2025, driving renewed investment CBRE. Savills cites strong returns in mid-market residential and BTR segments CBRE Media Assets. - Prime London
Still sluggish, with structural forces: higher taxes, non‑dom changes, overseas demand waning. Prime central London may yet recover long-term, but patience is required.
Our Verdict: A Good Time to Invest with Conditions
As ever, we strongly advise seeking professional investment advice before making any decisions.
Due to current conditions, mid-2025 looks like a good year to invest in UK property.
Low rates & improving affordability create a supportive financing environment.
Higher supply = wiser buyers, more negotiation room.
Regional differentiation makes mid‑market/industrial/commercial property particularly appealing.
However, there are still reasons to be cautious
- National economic uncertainties persist, such as unemployment, inflation, and political decisions.
- London remains soft; prime and central areas still lack momentum.
- Rental regulation and green‑EPC compliance add cost burdens for landlords
For detailed, personal investment advice tailored to your financial goals, please speak with one of our qualified investment advisors.
