UK property is one of the best investment markets in the world. It is a better option than stocks and shares and is set to keep growing in the coming years.
Whether you are investing as an individual or through a limited company, this is a great time to buy UK property. Market activity is increasing across the board, meaning that those who buy now will get the most return on investment in the future.
We have seen the Bank of England cut interest rates twice in the last four months. In August, the market received an immediate boost as borrowing costs fell.
In November, the rate was cut to 4.75% and all indications are that market activity is increasing again. That followed the new government delivering a Budget which was overall a positive for property investors.
House prices are at record highs and growing consistently
Before that Budget, the average house price in the UK had already reached a record high according to new data from Halifax.
A 0.2% rise in October makes the average property value £293,999, beating the previous high of £293,507 set in June 2022.
That is also the fourth consecutive month of house price growth in the UK, showing that the market has successfully returned to stable and predictable growth.
Commenting on the new record high, Amanda Bryden, head of mortgages at Halifax, said: “That house prices have reached these heights again in the current economic climate may come as a surprise to many, but perhaps more noteworthy is that they didn’t fall very far in the first place.”
The Covid-19 pandemic was not a good time for many people thanks to the economic uncertainty. However, the property market proved its resilience.
Now, having reached a new high in Q4 2024, there is much to look forward to in the future – especially as it looks like interest rates will be cut again in the near future and borrowing will become even more affordable.
That will make UK investment property for sale even more valuable from 2025 onwards. In particular, in the North West which is the UK’s best property investment location.
Buyer demand and number of sales surge upwards
Those record house prices are in part down to a surge of buyers entering the market and a high number of house sales – more evidence that UK property market activity is increasing in Q4 2024.
The latest House Price Index from Zoopla shows that there are currently 26% more sales agreed than at this time last year. The data also shows that the total value of those sales has gone up 30% year-on-year, with a total of £113bn of property sales waiting to be completed.
Importantly, that includes a lot of first-time buyers who are entering the market thanks to lower borrowing costs. Zoopla data shows first-time purchases now account for more than a third of all sales this year.
That is important for investors because it increases competition for available properties. If new buyers can’t afford to enter the market, demand doesn’t increase sufficiently to push house prices up.
Now though, the most in-demand accommodation like Manchester city centre apartments and Liverpool properties for sale has a whole new group of potential buyers who will push up property values.
Will house prices go up in 2025?
All this market activity at the end of 2024 means that house prices are likely to keep going up in 2025. More buyers, more sales and better market conditions mean that we can expect the good news to continue.
Additionally, we are likely to see more cuts to the base rate of interest in the next six months, according to Bank of England governor Andrew Bailey, who said rates would "continue to fall gradually from here.”
That will reduce borrowing costs again and bring more people into the market. Buyers will also be incentivised to secure a property and complete before the new financial year thanks to the upcoming increases in Stamp Duty Land Tax.
For investors, all of that means properties you already own will get more valuable. It also means that this is the best time to invest in more properties so that you can benefit from the price growth rather than be penalised by it.
According to the latest five-year forecasts from Savills, capital appreciation could be as high as 23.4% by the end of 2029. The sooner you buy, the higher your returns will be.
For that reason, the best investment choices will be those made in the next six months. Get in touch with our experts today and make sure you don’t miss out on the chance to invest in the UK’s best buy-to-let properties.
