Our 2025 prediction results

Chubby Wallet
January 02, 2026

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Our 2025 property prediction results

Around this time last year, we ran a 2025 predictions article, where we predicted what we thought would happen in UK property throughout 2025.

We'll mark each prediction with one of the following:

Alright, let’s get into it…

Modest Price Growth, Not a Boom ✅ = correct

House prices in the UK rose modestly by approximately 1.1% to 1.8% over 2025, with annual growth slowing to 0.6% by December, according to Nationwide and Zoopla data.

London Re-enters an Outperformance Cycle ❌ = wrong

London house prices rose by only 0.7% in 2025, underperforming most regions, with Northern Ireland up 9.7%, North West up 3.5%, and Scotland up 1.9%.

Political Stability Restores Market Confidence 🟠 = partially correct

The 2024 Labour election victory provided some stability, contributing to resilient market activity with mortgage approvals near pre-Covid levels. However, budget speculation, Trump tariffs in April, and property tax uncertainties (e.g., stamp duty reversion) created jitters.

Transaction Volumes Normalise ✅ = correct

UK property sales volumes returned to the long-term average of around 1.2 million in 2025, up from lower levels in prior years, according to CBRE and Savills.

Accelerating but Insufficient Housebuilding ✅ = correct

Housebuilding increased, with Homes England reporting 38,308 starts (up 5%) and 36,872 completions (up 12%) for 2024-25, but remained well below the government's 300,000 annual target.

Interest Rates Enter a Downward Trajectory ✅ = correct

The Bank of England base rate fell from 4.75% in November 2024 to 3.75% by December 2025, with six cuts since August 2024, easing mortgage costs (average two-year fixed at 3.4% by Q4) and unlocking demand.

Affordability-Driven Buyer Behaviour ✅ = correct

Buyers remained price-sensitive and cautious, with affordability improving (house prices at 5.9 times earnings, best since 2015) but tight, driving demand for value-led properties.

Competitive Pricing Becomes Non-Negotiable ✅ = correct

Accurate pricing was essential, with overpricing leading to stagnation; 1 in 6 homes saw at least 5% discounts, and competitive strategies drove sales in a price-sensitive market.

Regulatory Reset in the Rental Sector ✅ = correct

The Renters’ Rights Act received Royal Assent in October 2025, reshaping landlord operations with bans on no-fault evictions, pet requests, and EPC reforms, increasing compliance costs and prompting portfolio adjustments ahead of May 2026 implementation.

Structural Strength in Lettings Demand ✅ = correct

Rental demand remained strong due to supply shortages, with average rents up 5.0% to £1,360, continuing to rise (though slowing from prior years).

THAT’S A WRAP

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