Positive Property Forecasts
A key factor for many investors considering ‘why invest in UK property’ is the positive property market forecasts we’re seeing for 2025 and beyond. Although 2023 saw a slight dip in house prices as the market corrected itself, 2024 has since showcased an impressive turn of fortunes for the property market whereby property prices began to rebound. So, if you have hopes of investing in UK property anytime soon, it is strongly recommended that you start exploring your options now before property prices continue to increase.
However, certain regions of the UK are set to see better growth than others. JLL’s latest predictions have pinpointed six key regions for growth, as outlined below:
| Region | 2024 | 2025 | 2026 | 2027 | Overall | |
| Greater London | 2.5% | 4% | 5% | 6% | 17.5% | |
| East Midlands | 2% | 5.5% | 5% | 4% | 16.5% | |
| South East | 2% | 4.5% | 4.5% | 5.5% | 16.5% | |
| West Midlands | 2% | 5% | 5% | 4.5% | 16.5% | |
| East of England | 2% | 5% | 4.5% | 4.5% | 16% | |
| Central London | 3% | 3.5% | 4% | 5% | 15.5% |
Source: JLL
This data alone is a clear indication of why buyers are looking to invest in the UK – regional cores are seeing high levels of growth, led by the Midlands and the East, as well as London. The Midlands is specifically attractive to investors as it is a more affordable region, thereby highlighting the potential of the location as an entry point for property investment.
While the South continues to be one of the most expensive regions in the country, it’s expected that London and the South East will rebound over the next four years after a challenging performance since 2016.
Long-Term Rental Growth
Wondering ‘should I invest in uk property’? Aside from property prices, another key contributor to why investors are looking to invest in UK property is the rental market forecasts.
Over the past number of years, the imbalance between supply and demand in the rental sector has contributed to soaring rental prices. Rental increases have outpaced earnings month after month, with rents increasing at a strong pace.
The average rental increase across the UK sits at 5.5% to September 2024. Cities with the most impressive growth from 2023 to 2024 have been Belfast at 10.1%, Newcastle at 8.8% and Liverpool at 8% growth over the past 12 months. However, predictions from JLL suggest that future rental price growth will be most impressive in Birmingham, Manchester and Edinburgh, with accumulative rental growth of over 21.7% over the next 5 years predicted for each of these cities.
With this in mind, UK property investments are becoming even more appealing – and with a growing demand for rental property, long-term forecasts are reflecting this.
Want to know more about the UK property market for 2025? Still wondering ‘is uk property a good investment’? Download the UK Investment Guide today and discover everything you need to know about UK property investment in the new year. In this guide you’ll find:
- Current market performance
- Forecasts for the UK property market in 2025
- Key trends impacting the market
- Best places to invest in 2025
The Perfect Storm Of Supply And Demand
For those still wondering, ‘why invest in UK property?’, the growing disparity between supply and demand is one of many reasons why investment remains appealing. Tenant demand is the key to a successful property investment, and with a growing population, property investment opportunities in the UK are becoming more lucrative.
The Private Rented Sector is the second largest tenure in the UK, with the value of buy-to-let properties now totalling over £1 trillion. As an ever-expanding market, research has suggested that tenants will outnumber homeowners by 2039, highlighting that the future UK property market will largely be dominated by landlords.
While the UK as a whole has one of the largest populations in Europe, key cities across the country are housing the majority of these residents. Specifically, Birmingham is one of the most populous cities in the UK, and with forecasts expecting the local population to hit 1.24 million by 2030, the demand for property will continue to outpace the supply.
A Growing Population
Yet another factor that is sure to influence the disparity between supply and demand is the huge population growth expected across the UK in the years to come. As home to some of the most successful businesses in the world, as well as having access to the finest higher education institutions, the UK remains popular for those from overseas. In fact, the UK population is on track to reach 74 million by 2035, a 9.9% increase in 15 years, which will inevitably equate to more tenants in the rental market, helping many investors in their quest to understand ‘why invest in the UK?’.
While ‘Generation Rent’ makes up the majority of the UK rental market, the number of over-50s renting property is increasing. The latest research suggests that there is a record-breaking 791,000 over-50s in the rental market, and with a quarter of the UK population reaching 65 or older by 2050, there are now more incentives to invest in buy-to-let property.
Young professionals have always been – and always will be – the biggest demographic of tenants. However, as the older generation continues to downsize and turn to the rental market, the demand for these different property types is giving investors the confidence to diversify their portfolios.
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Increasing Inward Investment
In recent years, the UK has received an increasing amount of Foreign Direct Investment (FDI) with research from EY demonstrating that the UK ranks 2nd in Europe for the number of foreign investment projects.
The West Midlands is proving particularly lucrative for foreign investment, seeing 1,555 new foreign direct investment projects land in the UK in 2023/4 alone.
With this FDI signifying the potential of the UK, more global businesses are taking the opportunity to open additional offices across the country. While London has long been the obvious choice for companies, the growing popularity of additional cities has seen a surge in regional office spaces.
For example, Birmingham is in the midst of an ambitious regeneration scheme, and with the city growing in residents and amenities, its commercial hub is expanding. In fact, the likes of PwC, HSBC and Goldman Sachs have all made big moves to the second city, demonstrating that business is booming in the UK and large global companies have faith in the British economy.
Frequently Asked Questions
Is buy-to-let a good investment?
If you were to measure how ‘good’ a buy-to-let investment is based on its past performance, this asset would probably come out on top. However, different assets will suit some more than others based on their financial goals.
If you’re looking for a resilient asset that can offer a passive income as well as the opportunity for capital growth, buy-to-let property could be the best asset for you.
With JLL suggesting that UK property values could see a cumulative boost of 17.6%, and a rental price boost of 18.8% until 2028, forecasts suggest that buy-to-let property could be the route to financial freedom for many investors.
Is buy-to-let worth it?
When it comes to investing there’s generally no ‘one size fits all’ approach and buy-to-let property will suit some investors more than others.
However, for those who are looking for a long-term investment asset with a track record of competitive growth and more price increases on the horizon, buy-to-let is often the best option.
Buy-to-let is a flexible investment assets and can offer diversification across a wider portfolio. It’s historically one of the most stable assets and is much less exposed to external factors, plus it’s a physical asset, which makes it appealing with certain investors.
The answer to ‘is it worth it?’ depends entirely on how you use it. If you use it as a long-term asset, it’s proven to be a potentially lucrative investment vehicle that can be scaled effectively.
How to start investing in property?
For those that want to know how to start investing in property, the most successful investments often start with a clear financial plan.
By understanding your investment goals, you’ll be able to determine which asset is best for reaching your objectives and how it can be scaled.
More specifically, this could be an asset that offers higher short-term returns or a property built for a longer holding pattern.
Once you understand this, you can start deciding on locations, property sizes and tenant demographics you might want to target.
Finally, you’ll then be able to explore finance options and partners that you can work with.
Why invest in UK property?
UK property is recognised as one of the most appealing investment assets across the world. In comparison to other markets, the UK property market is not only resilient, but it can offer consistent short- and long-term returns.
While rental income can usually cover the monthly payments of the property and then some, this asset also grows over time. UK property prices have been on a consistent upward trajectory and have recovered well from the unease of 2021’s pandemic property market which saw some sharp peaks and troughs: a testament to the long-term resilience of this asset class. What’s more, the average property is worth 87% more now than it was a decade ago according to the Land Registry UK House Price Index, demonstrating the potential for capital growth.
The answer to ‘is it worth it?’ depends entirely on how you use it. If you use it as a long-term asset, it’s proven to be a potentially lucrative investment vehicle that can be scaled effectively.
Where to invest in buy-to-let in the UK?
Understanding where to invest in buy-to-let in the UK continues to be a tough decision for many investors, especially with so many potential locations in the country.
The best way to answer this question is to establish what you’re looking to achieve. Do you have short or long-term goals? Are you looking for capital growth or rental yields?
If you’re looking for more immediate rental returns, you’ll need a location with high yields and strong tenant demand. Look to established cities such as Birmingham and Manchester which have undeniably strong tenant demand, great job opportunities and an abundance of inner-city amenities.
On the other hand, if you’re investing for capital growth, you’ll want to identify areas that are regenerating and redeveloping the surroundings. This kind of activity often pushes property prices higher, which can deliver appreciation over time. Look to up-and-coming cities that are attracting those participating in the London exodus and experiencing swathes of regeneration, such as Leeds.
Will prices fall in the UK?
There is no strong evidence that UK property values will fall in the next few years. Predictions from the likes of Savills and JLL agree that the property market is on a strong path of continued growth, with each year until 2028 forecast to experience at least 2% property price growth and 3% rental price growth according to JLL.