{"id":6103548,"date":"2024-12-06T08:50:53","date_gmt":"2024-12-06T07:50:53","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6103548"},"modified":"2024-12-05T21:48:15","modified_gmt":"2024-12-05T20:48:15","slug":"property-investment-2025-tp","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/news\/property-investment-2025-tp\/","title":{"rendered":"Property investment predictions for 2025: where will prices rise the most?"},"content":{"rendered":"

Buyers seeking the most promising property investment options for the year ahead may see the greatest gains in the mainstream residential market.<\/h2>\n

From a property investment perspective, there are plenty of positives for investors looking to maintain or extend their portfolios in the year ahead.<\/p>\n

Investors and homebuyers alike have until the end of March to secure their purchases before stamp duty thresholds<\/a> and rates revert to their previous levels – and although the property tax has been increased to 5% for those buying an additional property, this is expected to do little to dampen appetite<\/a> as the fundamentals of the housing market remain strong.<\/p>\n

Supply remains constrained in both the sales and the rental market, supporting prices<\/a> in both sectors, with landlords experiencing record-high rental yields due to extremely strong tenant demand. This is particularly the case in the north of England<\/a>, where yields have been outpacing the south.<\/p>\n

The north has also seen the greatest growth in property prices, and this is\u00a0forecast to continue, with both the North West<\/a> and the North East in particular expected to continue to be key property investment destinations as a result.<\/p>\n

Housebuilding<\/a> remains high on the agenda of the government, with the Prime Minister vowing to unlock planning blockages to get more sites developed across the country, alongside greater investment in the north of England. This is likely going to increase the number of property investment opportunities in towns and cities where more sites are being unlocked.<\/p>\n

Higher mortgage costs have had an impact on some parts of the market in terms of affordability, but these have already reduced over the course of 2024; and analysts expect the Bank of England to reduce rates in 2025, which should spur on competition in the mortgage market and make borrowing cheaper.<\/p>\n

The outlook for house prices<\/h3>\n

Savills<\/a> has released its latest predictions for the UK property market, and it has penned the greatest level of growth in the mainstream markets as opposed to the prime sector.<\/p>\n

The agency notes that, during “normal” housing market recovery, the top end of the market would be the first to recover as prime property buyers tend to be more sentiment-fuelled. As confidence rises, sales and values at the upper end of the market tend to pick up, while the lower end can take longer to get back on track.<\/p>\n

However, numerous factors have combined to drive greater growth in the mainstream markets, such as the higher stamp duty surcharge for additional properties, as well as changes to non-dom taxation, and changing VAT rules on school fees. This means property investment may be more active in the lower-priced markets.<\/p>\n

Over the next five years, Savills predicts mainstream UK house prices will rise by a cumulative 23.4%, with a 4% increase next year. Prime regional prices are forecast to rise at a slightly slower rate of 18.2%, with just a 2% increase in 2025. Just behind this, London mainstream prices could climb by 17.1% by 2029.<\/p>\n

At the other end of the scale, prime Central London is expected to fare the worst, with total accumulated growth of just 9.6% over the next five years. This is largely due to a pull-back next year, with prices expected to fall by -4%.<\/p>\n

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