As the economic dust settles, the UK property market is entering a new cycle. While challenges remain, the outlook for 2025 is characterized by stabilization and specific pockets of high opportunity. Here is our strategic analysis.

Interest Rate Stabilization

Markets are pricing in a gradual reduction in the Bank of England base rate. This stability helps to unfreeze transaction volumes, as buyers can plan their mortgages with greater certainty. We expect a modest return to capital growth in Q3/Q4.

The Rental Crisis

Landlords exiting the sector due to tax changes has exacerbated the supply shortage. Rents in London and key regional cities are at record highs. For investors, this means yields are improving, provided the entry price is right.

Construction Cost Inflation

While material costs have flattened, labour shortages keep build costs high. This places a premium on "turnkey" developments. Investors are increasingly wary of "fixer-uppers" due to the unpredictability of refurbishment costs, favoring new-builds with warranties.

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