Navigating the Summer Property Market

Whether you’re a new property investor or in the process of expanding your portfolio, the summer can typically be a busy time. While it’s often an ideal opportunity to search for new and different properties in exciting locations that have high yield potential, changing market dynamics, evolving regulations, and interesting property insights paint a rather unpredictable but enticing summer ahead.

Investors in 2025 are facing a more intricate property landscape. Although recent interest rate cuts provide some relief, new policies and geopolitical shifts, such as sweeping trade tariffs introduced by US President Donald Trump and recent changes to Stamp Duty Land Tax (SDLT), have changed the dynamics of the UK property market. 

As such it’s important to understand the current property market, whether you’re in the early stages of building your portfolio or in the midst of securing new holdings. Is now the time to explore different property investments and locations, or is it wise to exercise caution in the market? In this article, we will explore how investors can navigate the summer property market and what to expect. 

National and Regional Market Performance

One of the more crucial considerations for navigating the summer property market is the Stamp Duty threshold increase that came into effect from the 1st of April 2025. The band from £125,001 to £250,000 reverted to the 2% rate, meaning buyers of second homes will have to pay 7%, due to the 5% surcharge. First-time buyer relief thresholds have reduced, with the nil rate applying to the first £300,000 of properties up to £500,000. Investors who secured deals before the deadline may benefit from stronger cash flow in the coming months.

Following a surge in mortgage completions in March, as buyers rapidly tried to meet the April threshold rollback, recent data suggests that the national property market is stabilising. According to Nationwide, despite a 0.6% monthly price fall in April, the three-month-on-three-month measure remains positive, suggesting that the market is adjusting well to policy changes. 

Regionally, significant variations remain in property prices and growth rates:

• Central London has regained momentum as international buyers return.
• Locations with universities (such as Liverpool and Manchester) demonstrate resilience through consistent student demand.
• The North West, particularly Liverpool, is forecast to outperform the national average by 4.5% in 2025.
• UK average property values are expected to rise by 2.5% by the end of 2025. 

Fluctuating Interest Rates

The Bank of England’s current base interest rate of 4.25% has prompted more mortgage lenders to offer fixed-rate deals below 4%, with the latest lending figures reporting net mortgage borrowing jumped to £13 billion in March, the highest level since mid-2021. The improved borrowing activity is a promising sign for buy-to-let investors.

Additionally, the global reaction to President Trump’s widespread trade tariffs may accelerate further interest rate cuts to stimulate the UK economy, potentially benefiting mortgage holders by reducing costs and improving overall cash flow. ‘

For property investors, the cost of capital shows encouraging signs. The average two-year SWAP rate fell to 3.77% in April (down from 4.13% in Q1 2025, suggesting that borrowing may become easier. Market projections indicate that the Sterling Overnight Index Average (SONIA) could sit at 3.73%, which is equivalent to a Bank of England base rate of 3.75%.

As borrowing costs fall, it could suggest a shift for the UK property market post-summer, as property investors with a clear roadmap could gain access to flexible, healthy finance.  

Short-Term Lets In The Summer Property Market

One of the most talked-about trends is the evolving role of short-term lets in the UK property market. Platforms like Airbnb and Vrbo continue to drive interest in this high-yield asset class, especially in cities with strong tourism, seasonal demand, or event-led economies.

However, 2025 is a pivotal year for short-term let investors, as new licensing and planning frameworks come into effect across multiple regions.

What’s Changing:

• Mandatory Registration Schemes: Local authorities in key cities, including London, Edinburgh, and Bristol, have rolled out compulsory registration and compliance checks for short-term let properties.
• Planning Class Changes: New planning use classes differentiate between full-time residential lets and holiday/short-term rentals. In some areas, converting a property to short-term let use now requires planning permission.
• Cap on Days: Several councils are enforcing a 90-day cap on short-term lets without planning consent, directly affecting landlord returns.

Despite the regulatory tightening, short-term lets can offer gross yields of 8–12%, or higher, offering more than many traditional buy-to-let options. Properties in tourist hotspots (e.g. Liverpool) and business-travel cities (e.g., Manchester, Birmingham) remain strong performers.

Additionally, short-term lets are increasingly being used as flexible accommodation for:

• Corporate relocations
• Digital nomads and remote workers
• Event-based tourism (e.g. music festivals, major sporting events, conferences)

Property investors should look for areas with clear licensing frameworks and strong off-season demand to maximise occupancy and reduce regulatory impacts. Also, consider properties that can be both short- and long-term lets so you can adapt to market or legislative shifts that may effect the profitability of the property investment.

Key short-term let locations in 2025

• Manchester: Demand driven by a mix of tourism and business travel; new regulations favour licensed operators.
• Liverpool: Cultural events, proximity to Anfield and development zones make it a short-let hotspot with relatively low entry costs.
• North Wales: Areas outside major cities but within designated tourism corridors offer fewer restrictions and high summer demand. 

Property investment strategies for Summer 2025

While reviewing your current portfolio is essential, this summer may also present the right moment to explore new sectors and regions. 

Developing expertise in one specialism, whether it’s student properties, HMOs, apartments, or off-plan property can solidify investors as experts. Managing similar properties allows for healthy economies of scale, potentially improving their margins in an environment where costs are high for professional services like contracting and maintenance. 

It is also important to be aware of other opportunities given their market potential. The current market data proposes a compelling argument for investors to strategically diversify their property types and locations.

Strategic investments in different properties provide some level of protection in the wake of sector-specific downturns or market downturns. Moreover, current regional market data pinpoints unusual disparities in potential returns. For example, purpose-built student accommodation (PBSA) and student HMOs in university towns are outperforming traditional buy-to-lets in many southern regions, while still requiring similar levels of capital.

Key region specific developments

Several region-wide developments also suggest new potential for investors, including:

• Infrastructure overhauls like Liverpool’s £100 million Baltic Triangle Station – expected to boost property values and connectivity in the Baltic Triangle post-completion date (2027-2028).
• Commonhold legislation replacing outdated leasehold rules for new flats in England and Wales, and the proposed abolition of ground rent and restrictive lease terms.
• Government initiatives offering five-year full-rental assurance agreements to provide security for families and provide a stable income stream for investors in the midlands, north west and east of England.

Should you explore the property market during the summer?

The ideal approach likely combines elements of both specialisation and diversification. Many successful investors maintain a strong core portfolio in their area(s) while allocating a percentage to experimental diversification, whether in different property types or locations.

This “core and satellite” approach provides stability while creating growth opportunities, particularly valuable in a market showing selective pricing softness rather than broad trends in either direction.

For investors looking to capitalise on current conditions, timing and deal structure matter more than speed. Investors focusing on refurbishment, retrofit, or value-add strategies may find compelling opportunities, particularly in areas with motivated sellers or development potential.

For expert guidance on navigating these opportunities in the summer property market and building a property portfolio aligned with your wealth-building goals, contact Advantage Investment today.