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Everything you need to know before buying real estate is included in our United Kingdom Property Pack
What is happening in the UK’s real estate market? Are prices going up or down? Is London still a hotspot for foreign investors? How is the UK government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from Manchester to Edinburgh and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the UK real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
How this content was created 🔎📝
Fact-checked and reviewed by our local expert
Laurence Rapp 🇬🇧
Sales representative at Spot Blue - International Real Estate Agency
1) Rural areas will see higher rental yields as remote work trends boost demand
Remote work is reshaping where people choose to live in the UK.
By October 2024, 41% of UK workers were working remotely at least part of the week. This shift has opened up opportunities for people to live further from their offices, sparking a surge in interest for homes in rural areas. As a result, rural housing applications have jumped by 80% since the pandemic began, reflecting a growing trend towards countryside living.
With this increased demand, rental yields in rural regions have climbed. For example, the North East of England boasts average rental yields of 8.13%, a figure echoed in Wales and the North West. This makes rural properties an attractive investment for those looking to capitalize on the remote work trend.
Many remote workers are drawn to rural areas for the better quality of life they offer, including cleaner air and a quieter environment. This lifestyle change is made even more appealing by the improved internet infrastructure in these areas, which supports the feasibility of working from home.
As remote work continues to gain traction, the demand for rural living is expected to grow. This trend is not just about escaping the city; it's about embracing a lifestyle that balances work and well-being. The countryside offers a unique blend of tranquility and connectivity, making it an ideal choice for many.
Sources: Property Investor Today, Use Bubbles, Fannie Mae
2) University towns will see rental market growth as students return, boosting yields for landlords
The rental market in university towns is buzzing with activity as students return.
With more students enrolling, 2.2 million will need housing by 2026, a big jump from 2021. Cities like Manchester, Liverpool, and Edinburgh are seeing a surge in demand for student accommodation. In Manchester, for example, over 12,000 people search for housing each month, showing just how keen students are to find a place.
Landlords in these areas are in a good spot. Higher student numbers mean higher rental prices, which is great for rental yields. Take Liverpool, where the average annual rental income is impressive, leading to a yield of 8.93%. This means landlords can expect better returns on their investments.
In Edinburgh, the story is similar. The city's vibrant student life and prestigious universities attract many students, pushing up demand for rentals. This demand often results in competitive rental prices, benefiting landlords who can capitalize on the influx of students.
Meanwhile, in Liverpool, the student population is booming, and so is the rental market. The city's appeal to students is undeniable, with its rich culture and lively atmosphere. This makes it a hotspot for student accommodation, where landlords can enjoy consistent rental income.
Manchester, with its bustling student scene, is another city where landlords are reaping the benefits. The high demand for student housing here means that properties are rarely vacant, ensuring steady rental yields for property owners.
Sources: Landlord Today, The Tab, Confused.com
We have made this infographic to give you a quick and clear snapshot of the property market in the UK. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Asian investors will focus more on UK properties, especially in cities with strong economic growth prospects
Asian investors are increasingly eyeing the UK property market, especially in cities with promising economic growth.
Even with a general slump in the UK real estate scene, foreign investors, particularly from Asia, are ramping up their investments. Between 2022 and 2024, they snapped up £50 billion worth of UK real estate, with Asian investors alone buying £6 billion more than they sold. This clearly signals a growing interest in the UK market.
Cities like Manchester, Leeds, and Birmingham are buzzing with economic regeneration. These areas are seeing house prices climb by 3-6% annually due to high demand and solid economic fundamentals. The ongoing infrastructure development in these cities makes them hot spots for investors seeking growth.
Moreover, the favorable foreign exchange rate for USD-pegged currencies is a big draw for Hong Kong and other Asian investors. As travel restrictions ease, this currency advantage makes UK properties more affordable and enticing.
Sources: Alvarez & Marsal, Total Insurance, CBRE
4) A weaker pound will draw more foreign investors seeking bargains in the UK property market
The weakening pound is a magnet for foreign investors eyeing UK properties.
When the pound dips against currencies like the dollar and euro, UK properties become more affordable for overseas buyers. This isn't just theory; it's a pattern we've seen before. Historical data shows that when the pound was weak, foreign investment in UK real estate surged.
In 2023 and 2024, reports highlighted a spike in interest and purchases from international buyers as the pound depreciated. Experts like Kathleen Brooks pointed out that the Bank of England's comments played a role in this depreciation, making UK properties even more enticing for global investors. During these times, foreign investors made up over 30% of the UK property market.
Real estate firms and media outlets have been buzzing about how the pound's fall is making UK properties a hot ticket for international buyers. The favorable exchange rates mean foreign investors can snag properties at a discount, which is a big draw. Investors from places like Hong Kong have been particularly active, seizing the opportunity to invest more due to these favorable conditions.
Sources: Buy Association Group, CBRE, IPF
5) Foreign buyers will target regional cities like Birmingham and Manchester for better value for money
Foreign buyers are turning their attention to regional cities like Birmingham and Manchester for better value compared to London.
London's property prices have skyrocketed, making it less affordable for savvy investors. In contrast, Birmingham's property prices have risen by 66% over the last decade, yet they still offer a more budget-friendly option. Looking ahead, Birmingham is set to see a 19.9% increase in property prices from 2024 to 2028, signaling strong growth potential.
Manchester is also catching the eye of investors. It ranks high in the FDI attractiveness index, which highlights its appeal for foreign investment. This city offers a compelling mix of affordability and potential, making it a smart choice for those seeking better value.
Rental yields in these cities are another big draw. In Birmingham's city center, properties are achieving yields between 5% and 6%, which is quite appealing for foreign investors looking for higher returns. This makes Birmingham a hotspot for those wanting to maximize their investment.
Infrastructure developments are adding to the allure. Birmingham's ambitious regeneration projects are set to boost demand for rental properties, attracting working professionals and increasing the city's appeal. These projects promise to enhance the city's infrastructure, making it even more attractive to investors.
Sources: Rightmove, Joseph Mews, BuyAssociation
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6) London rental yields will dip slightly as more people relocate to suburbs or regional cities
People are moving from London to the suburbs or regional cities because of skyrocketing property prices.
In the last two years, London's property prices have jumped by 31%, making it tough for many renters to afford living there. This has led to a noticeable shift in where people are choosing to settle down. The suburbs and regional cities are becoming more attractive, not just for their affordability but also for the lifestyle they offer.
Landlords are finding better returns outside of London. In the North, for example, the average gross yield is 7.4%, while in the South, it's 5.2%. These numbers are drawing property investors away from the capital, as they see more potential for profit in these areas.
The rise of remote work has also played a big role in this shift. People now have the freedom to live in more spacious and affordable places outside of London. This flexibility is causing a drop in rental demand in central London, as more people opt for the suburbs or regional cities.
Real estate agencies are already noticing this trend. They've reported a decrease in rental demand in central London, which is largely due to the high cost of living and rising rents in the city. This shift is expected to continue as more people seek out better value for their money.
As more people move out, London's rental yields are likely to decline slightly, making the suburbs and regional cities even more appealing for both renters and investors.
Sources: Savills, Hamptons, Zoopla
7) Coastal towns in the South West will see rising interest due to lifestyle shifts and seaside appeal
Coastal towns in the South West are becoming increasingly popular for property buyers due to lifestyle changes and the charm of seaside living.
In 2023, places like St Ives in Cornwall saw a 10% jump in house prices, and this trend continued into 2024 with Devon experiencing a 12% rise. This surge is largely driven by people seeking a more relaxed lifestyle by the sea.
The shift to remote work has made it easier for professionals to relocate, and many are choosing these coastal towns for their beautiful surroundings and slower pace. The UK's Office for National Statistics has noted a growing trend of remote workers moving to these areas, with towns like Padstow in Cornwall becoming popular choices.
Surveys reveal a strong preference for seaside living, with a 2023 study by the Royal Institution of Chartered Surveyors showing that 70% of people prefer coastal areas for their scenic beauty and quality of life. This is especially true for younger generations who value work-life balance and outdoor activities.
These towns offer a unique blend of natural beauty and modern convenience, making them attractive to those looking to escape the hustle and bustle of city life. The appeal of seaside living is not just about the view; it's about a better quality of life and a sense of community.
Sources: Rightmove, Zoopla, Office for National Statistics (ONS), Royal Institution of Chartered Surveyors (RICS)
8) Green spaces and parks will increasingly influence property desirability, particularly in urban areas
Green spaces and parks are now a major factor in property desirability, especially in cities.
In England and Wales, homes near green spaces have seen a noticeable price premium, particularly for those within 100 meters of these areas. This trend reflects a growing demand for properties with easy access to nature. People are increasingly aware of the mental and physical health benefits that come with living near parks. For instance, having a park nearby can help lower childhood obesity rates and encourage more physical activity.
The shift to remote work has also played a role in this trend. With more people working from home, the desire for nearby recreational spaces has grown, making properties near parks even more appealing. Urban planning is catching up with this demand. In 2023, Natural England introduced the Green Infrastructure Framework, aiming to boost green cover in urban residential areas. This policy shift shows a growing recognition of the importance of green spaces in city living.
For potential homebuyers, this means that properties near parks are not just about aesthetics; they offer tangible health benefits and a better quality of life. The demand for such homes is likely to continue rising as more people prioritize their well-being and work-life balance. Urban planners are increasingly incorporating green spaces into new developments, ensuring that future urban living includes ample access to nature.
As cities grow, the availability of green spaces will become a key factor in property desirability. This is not just a trend but a shift in how we value our living environments. The integration of parks and green areas into urban planning is a response to this new demand, making them essential for future developments.
Sources: ONS, Gov.uk, County Health Rankings
We made this infographic to show you how property prices in the UK compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Demand for retirement-friendly properties will grow in areas with excellent healthcare due to an aging population
An aging population is boosting demand for retirement-friendly homes in areas with good healthcare.
People in the UK are living longer, and this means they need homes that suit their changing needs as they age. In 2023, a report by Knight Frank showed that retirees are increasingly looking for downsized or specialized housing. The main reason is the desire for easier maintenance and better access to healthcare services. According to surveys from the UK's Retirement Living Association, 75% of retirees consider healthcare access a top priority when choosing a retirement community.
The UK's population is aging fast. By 2035, 23% of the population will be aged 65 or over, up from 18% in 2019. This shift means more people will be searching for homes that meet their specific needs, like being close to healthcare facilities. Real estate trends from 2023 also showed a higher demand for properties in areas rich in healthcare services, which supports this growing need.
For those considering buying property in the countryside, it's worth noting that areas with good healthcare facilities are becoming increasingly popular. This is not just about having a hospital nearby; it's about having a network of healthcare services that can cater to various needs. Retirement-friendly properties are often designed with accessibility in mind, making them more appealing to older buyers.
Insider knowledge suggests that some of the most sought-after areas are those with a combination of scenic beauty and robust healthcare infrastructure. These areas offer a peaceful lifestyle without compromising on essential services. Properties in such locations are likely to see a rise in value as demand continues to grow.
For potential buyers, understanding these trends can be crucial. Investing in a property that aligns with these needs not only provides a comfortable living environment but also a sound financial decision. As the population ages, the demand for such properties is expected to increase, making them a wise investment choice.
Sources: Office for National Statistics (ONS), Office for National Statistics (ONS), Savills
10) New stamp duty rules will affect property affordability, especially for first-time buyers
Changes in stamp duty regulations can significantly impact the affordability of properties, especially for first-time buyers.
Remember the 2020 stamp duty holiday? It caused a surge in property transactions, which dropped sharply once the holiday ended. This shows just how sensitive the market is to these changes. For first-time buyers, the recent reduction in the stamp duty threshold from £425,000 to £300,000 means more properties will now incur stamp duty costs. This change can add substantial upfront costs, like an additional £11,250 for buyers in London, making it harder for them to afford a home.
First-time buyers are already juggling other upfront costs like legal fees and survey costs. The increased stamp duty rates could add around £2,500 more, further straining their budgets. Regional variations also play a role, with areas like London being more affected due to higher average house prices.
In London, where property prices are already sky-high, this change is a big deal. Imagine trying to save for a deposit and then having to find extra cash for stamp duty. It's a tough situation for many. The market's sensitivity to these changes is evident, and first-time buyers are feeling the pinch.
Elsewhere, the impact might not be as severe, but it's still there. Buyers in regions with lower property prices might not feel the hit as hard, but any increase in costs can be a hurdle. It's a balancing act, and these changes tip the scales.
So, if you're thinking about buying a property, especially for the first time, keep an eye on these stamp duty changes. They can make a big difference in what you can afford and where you can buy.
Sources: Howells Law, Property Industry Eye, Clever Mortgages, Mortgage Medics
We believe this video highlights the upcoming changes in stamp duty regulations and how they could affect affordability for first-time buyers.
11) Interest in properties within close-knit neighborhoods will grow due to the desire for community living
Community living is becoming a big draw for those looking to buy property in close-knit neighborhoods.
Between 2020 and 2023, the UK saw a boom in the co-living sector, with plans for over 12,150 new beds being submitted. This shows a clear demand for places where people can live together and share experiences.
Co-housing communities, which focus on shared activities and communal living, are also gaining traction. The UK currently has 19 built co-housing communities, with more than 60 projects in the pipeline. This trend highlights a growing interest in living arrangements that promote strong community bonds.
According to the 2023/24 Community Research Index, 61% of people in the UK feel connected to their local community. This sense of belonging is a key factor driving interest in properties located in neighborhoods with strong community ties.
People are increasingly drawn to areas where they can be part of a community, and this is reflected in the rise of co-living and co-housing projects. These developments offer more than just a place to live; they provide a sense of belonging and shared purpose.
As more people seek out these community-focused living options, the property market is responding with new developments that cater to this demand. The desire for community living is reshaping how and where people choose to live.
Sources: Community Research Index, Savills Research, SCIE Housing Models
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12) Properties with home office spaces will gain popularity as remote work becomes a lasting trend
In 2023 and 2024, the real estate market is seeing a big shift towards homes with dedicated office spaces.
More and more homebuyers are looking for properties that can support their remote work needs. This means homes with adaptable layouts and extra rooms for offices are in high demand. It's not just about having a spare room; it's about having a space that can be transformed into a productive work environment.
People are also investing in their home offices, with a noticeable increase in the purchase of high-quality office furniture. Companies like Office Furniture Online have seen a surge in sales, as individuals buy desks, chairs, and storage solutions to create efficient workspaces at home.
Surveys reveal that a significant number of employees prefer a hybrid or fully remote work setup. In fact, 85% of remote workers have expressed a desire to continue working from home at least part-time. This trend spans across all age groups, showing a widespread shift in work preferences.
Many large UK employers are embracing this change by implementing permanent remote or hybrid work policies. This move by employers is driving the demand for homes with dedicated office spaces, as employees look for environments that support their new work lifestyles.
As remote work becomes a permanent fixture, properties with home office spaces are becoming more popular. This trend is reshaping the housing market, making it essential for potential buyers to consider homes that offer the flexibility and functionality needed for remote work.
Sources: Office Furniture Online, The McLemore Group, The Home Office Life
13) The rise of co-living spaces will affect demand for traditional rentals in urban areas
The rise of co-living spaces is changing urban housing.
In the UK, there are currently 7,540 co-living homes with more on the way. These spaces are popping up not just in London but also in cities like Manchester and Birmingham, where young professionals are flocking for job opportunities. This trend is fueled by the need for flexibility and community, making co-living a hot choice for those in their late 20s to 40s.
Co-living spaces are not just popular; they are thriving. Some projects hit full occupancy within months, showing how much people love them. A survey by Homeviews even found that 92% of tenants would recommend these spaces to others. This high demand is a clear sign that co-living is here to stay.
Investors are taking note, pouring nearly £1 billion into co-living developments since 2020. This influx of cash is helping to expand these spaces beyond the capital, making them more accessible to people across the country. The focus is on creating environments that offer both privacy and social interaction, which is a big draw for the younger crowd.
With more than 13,483 units under construction or planned, the co-living sector is set to grow even more. This expansion is not just about numbers; it's about meeting the needs of a generation that values experiences over possessions. The trend is reshaping how we think about living in cities.
As co-living becomes more popular, it could impact the demand for traditional rentals. People are looking for more than just a place to sleep; they want a community. This shift could mean big changes for the rental market in urban areas.
Sources: Knight Frank, The Sector Scope, Turley
14) London’s luxury property market will slightly decline as international buyers grow more cautious
The luxury property market in London is seeing a slight decline as international buyers grow more cautious.
One key reason is the drop in high-value property sales in prime areas like Westminster and Kensington & Chelsea. This is largely due to the exit of Russian high-net-worth individuals, who face sanctions and find it difficult to move assets from Russia to the UK. These areas, once bustling with international transactions, are now quieter, reflecting a shift in buyer demographics.
Stricter regulations are also making waves. The 'register of beneficial ownership' has made some overseas buyers wary, fearing their London addresses might become public. This transparency requirement, while aimed at curbing illicit activities, has inadvertently made some investors think twice. Additionally, the Annual Tax on Enveloped Dwellings (ATED) is a financial burden that discourages potential buyers.
Economic and political factors add to the mix. The global economic climate, influenced by events like the Ukraine invasion, has made it tough for Russian investors. Political uncertainties, such as the upcoming general election and potential tax changes under a Labour government, have also dampened international interest.
For those considering a purchase, it's worth noting that these factors are reshaping the market landscape. The cautious approach of international buyers is not just about financial implications but also about navigating a complex regulatory environment. This shift is particularly evident in the luxury segment, where buyers are more sensitive to these changes.
As a potential buyer, understanding these dynamics can offer a strategic advantage. While the market is cooling, opportunities may arise for those who can navigate the current landscape effectively. The decline in international transactions might open doors for domestic buyers or those willing to adapt to the new norms.
Sources: Lubbock Fine, Chambre London, Bloomberg
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the UK. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Virtual reality tours will become more common, simplifying remote property viewings for buyers
Virtual reality (VR) property tours are becoming a game-changer in the real estate market.
Back in 2023 and 2024, the UK PropTech sector saw a massive boost, with investments skyrocketing from £172.38 million in 2016 to £2.66 billion by 2024. This surge has made VR technology more accessible and affordable, transforming how we explore properties. Imagine being able to walk through a potential new home without leaving your couch—this is now a reality thanks to these advancements.
Buyers are loving this new way of house hunting. A survey revealed that 67% of home buyers preferred virtual tours when checking out listings. Even more striking, 90% said they'd be more likely to buy if a virtual tour was available. This shift in preference is pushing real estate companies to offer more immersive experiences, moving beyond static photos to dynamic, interactive tours.
With VR, you can now explore homes and offices in detail from anywhere. Cities like Liverpool, Leicester, and Manchester are leading the charge, offering a growing number of listings with virtual tours. Thanks to better internet and broadband, these experiences are smoother and more accessible, making it easier for buyers to view properties remotely.
As VR technology continues to evolve, expect even more realistic and interactive tours. This trend is reshaping the real estate landscape, offering buyers a convenient and comprehensive way to explore properties. It's not just about seeing a home; it's about experiencing it, and that's a game-changer for anyone looking to buy property in the country.
Sources: PhotoUp, The Luxury Playbook, Fortune Business Insights
16) Investors will find London’s outer boroughs more appealing as people look for affordable options outside central London
London's outer boroughs are becoming a hot spot for investors seeking more affordable property options compared to central London.
With central London property prices expected to rise by 16.4% in the coming years, many are looking elsewhere. Outer boroughs are benefiting from major transport and infrastructure upgrades, like the Thamesmead regeneration project, which is getting over £1 billion in investment. This project is not just about better transport; it's also about adding new shops and leisure spots, making the area more appealing.
Another game-changer is the Old Oak Common project, a massive £26 billion investment. It's transforming the area with new homes, businesses, and a Crossrail station, making it a magnet for investors. These improvements are making outer boroughs more attractive for those seeking better returns on their investments.
Outer boroughs often offer higher rental yields than central London. Regeneration projects in these areas are seeing growth rates that outpace the broader market by 4.9%. Government initiatives, like the £8 billion White City regeneration, are creating thousands of new homes and jobs, further boosting the appeal of these areas.
Demographic shifts are also playing a role. With more people working remotely, there's less need to live near central business districts. This has led to a growing interest in outer boroughs, where people can find more space and a better quality of life. Surveys show a preference for more space and greenery, which these areas can offer.
As people prioritize space and quality of life, outer boroughs are becoming increasingly attractive. This trend is supported by the availability of more space and greenery, making these areas a preferred choice for many.
Sources: Rothmore Property, Statista, Knight Frank
17) European buyers will adopt a cautious approach due to Brexit uncertainties, affecting demand in some areas
Since Brexit, European buyers are treading carefully when it comes to UK property investments.
The end of the single market and freedom of movement has introduced more red tape and higher costs for Europeans eyeing UK real estate. This has made the buying process not just more complex but also pricier, which is a big turn-off for many potential investors.
Surveys reveal that interest from European investors in UK real estate has dipped. Many see Brexit as a misstep, creating an investment climate that's less appealing. The uncertainty about the UK's economic future only adds to their hesitation.
Economic forecasts aren't painting a rosy picture either. With Brexit uncertainties still looming, there's a predicted decline in foreign investment. The UK's GDP is expected to take a hit, potentially dropping by up to 3.2% by 2025, which doesn't exactly boost investor confidence.
All these factors are causing a noticeable drop in property inquiries from EU countries. The cautious stance of European buyers is reshaping demand in certain areas, making it a challenging time for the UK property market.
Sources: The Impact Of Brexit On UK's Real Estate Market, Brexit effect on GDP forecast 2024, The Impact of Brexit on UK Property Investment
In this video, Brexit's impact on the UK property market is analyzed, illustrating how uncertainties have influenced European buyers' cautious approaches.
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.
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