Why the Safe Money is on Property in 2025

It’s been a bumpy ride on the stock market this year. In contrast, property has proved to be a stable, resilient investment option.

Two issues have dominated the economic news this year: Trump’s tariffs and stock market volatility.

But amid all the chaos, one story has gone somewhat under the radar: the solid performance of the property market.

As we near the mid-point of 2025 (yes, it’s hard to believe we’re nearly there already), let’s review the year so far and analyse what lies ahead for the housing sector.

Resilience

Property has, for many years, delivered a steady return on investment. And judging by the forecasts, this looks set to continue.

While the stock market has gone down (the Dow Jones by 5% and the FTSE 100 by 1.9%*), property prices have gone up.

Savills predicts house prices will increase by 4% this year and by 23.4% over a five-year period up to 2029.

This follows on from a stronger than expected performance last year, where values grew by 4.7% according to Nationwide. 

There are many reasons underpinning the ongoing growth in the housing market, one of the most potent being the mismatch between demand and supply.

While the Government has pledged to fast-track housebuilding, as of yet, we’ve not seen a material change to housing numbers.

Safety

Knight Frank released a report last month stating that the UK property market has become a safe haven for investors, albeit not by design but by default.

It said that economic instability and uncertainty elsewhere in the world, partly caused by Trump’s see-sawing position on tariffs and the jitters caused on the markets, have prompted overseas investors to look to the UK to park their money.

As a result, many have decided that the UK property market is a good place to invest. There’s a lot to be said for stability and security.

Interest rates and mortgages

So far this year, the Bank of England’s Monetary Policy Committee has cut base rates twice: first in February and then earlier this month.

And the mood music suggests that further cuts could be on the way, with forecasters predicting the base rate will hit 3.75% by the end of 2025.

Obviously, these are only projections and cuts are not set in stone, but it’s fair to say the outlook is positive.

Drops in interest rates typically boost activity and confidence, so we could be in for a busy summer in the property market.

There has also been good news from the mortgage sector, where product choice hit an eight-year high in April.

Increased competition has seen many borrowers drop their rates to below 4%. However, you’ll need a pretty solid deposit to take advantage of such deals.

Some high street banks have also loosened their affordability criteria. (The move was prompted by the Financial Conduct Authority, which called on lenders to rethink their affordability stress-testing in the face of declining interest rates.)

These changes are expected to be especially beneficial for first-time buyers looking to get on the housing ladder, and second-steppers seeking more space.

Zoopla said in its April House Price Index Report that these changes could boost buying power by 15 to 20%, and support demand and sales agreed.

Long-term rental growth

Those looking to enjoy the dual returns associated with owning a buy-to-let – rental income and capital appreciation – will be pleased to know that demand for rental properties remains strong.

There are, on average, 12 people chasing every rental property, according to Zoopla.

The property platform predicts UK rents will rise by 3 or 4% this year.

Why property is still a good investment

All the current talk of ‘bear markets’ and buying when share prices are low may appeal to those with a strong stomach for risk.

So, if you’re looking to make quick returns and are willing to push the envelope, then more speculative investment opportunities may be right for you.

But if you’re after a safe, long-term investment – especially as uncertainty still hovers over the tariff issue – then property can certainly deliver (providing you buy wisely, of course).

If you’re a landlord looking to expand your portfolio or a homeowner looking to size up or down, contact us.

We can give you more insight into current values in the local market, and, if you’re selling, advice about marketing your existing property.

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* Covers the period between April 2 and 29.