The UK property market has had a great start to 2025, marked by increased buyer activity and positive forecasts this January. In this article, we’ll walk you through the key events of the January 2025 property market and how they could impact your property investment strategy.
2025 Starts Off Strong
The UK property market has started the year off emphatically, according to Rightmove. The average price of property has jumped by 1.7% this January from December 2024, the biggest jump since 2020. This is also an 11% rise on the average price in January 2024.
While prices generally tend to rise in January, this was a particularly big rise. As we reported last month in our Property Outlook for 2025: Trends to Watch and UK Property Market News Round-up – December blogs, the impending threshold increase on Stamp Duty for buy-to-let investors was expected to make the first quarter of 2025 a busy period in the property market.
These figures paint a positive outlook for 2025, with many experts forecasting a significant number of transactions. Savills, for instance, predicts a 4% rise in property prices over the next year. This presents an ideal opportunity for investment, as property values are poised to increase and will likely continue to appreciate throughout the year.
2024 House Prices End On A High
House prices rose for the fourth consecutive month in December, according to Nationwide. Prices increased by 0.7% from November, bringing the average price of a home to £269,426—up 4.7% year-on-year. This marks the highest annual price growth since October 2022, when prices surged by 7.2% following the 2022 mini-budget, which sent borrowing costs spiralling.
This price rise is a positive sign for the property market overall. For buy-to-let investors, it highlights the ongoing appreciation of their capital. For buy-to-sell investors, it suggests the potential for stronger returns on investment.
Donald Trump Elected US President
Donald Trump officially assumed the US Presidency on January 20th, following his victory over Kamala Harris in the November 5th, 2024 election. US elections often have a significant impact on the UK property market. Historically, house prices in the UK have tended to rise 10% more during Democratic presidencies compared to Republican ones.
Trump has proposed introducing tariffs on foreign countries, which could lead to higher inflation in the UK. This, in turn, may result in increased interest rates, which will increase mortgage rates. Additionally, Trump is expected to pass legislation aimed at strengthening the US dollar. A stronger dollar would raise the cost of imports for the UK, which are priced in dollars, further fuelling inflation. This combination of factors is likely to influence interest rate decisions in the UK, which will have an overall impact on the housing market due to the broader economic implications (e.g. cost-of-living, higher borrowing costs).
Potential Changes In Mortgage Rules
The Financial Conduct Authority (FCA) will review mortgage rules introduced after the 2008 financial crisis and may loosen restrictions to make it easier for more people to borrow for a home. Lenders have welcomed this move, eager to promote growth in the market.
If the rules relax, it could open the door for more individuals, particularly first-time buyers, to secure a mortgage and provide a significant boost to the housing market. The changes may also extend to buy-to-let mortgages, making it easier for potential investors to enter the property market. This is certainly something to watch closely as the FCA deliberates on future loan regulations.
1,000 New Jobs in AI Announced for Liverpool
Prime Minister Keir Starmer has unveiled an initiative to position the UK as a global leader in artificial intelligence. As part of this vision, Kyndryl—the world’s largest provider of IT infrastructure services—will establish a new technology hub in the Liverpool City Region, creating 1,000 jobs over the next three years. This landmark development will further stimulate Liverpool’s transformation, building on the regeneration of key areas such as Baltic Triangle, the Waterfront, and Liverpool One. With this growth, Liverpool is becoming an increasingly attractive destination for young professionals seeking rental opportunities, making it a prime hotspot for buy-to-let investors.
Explore our property investment opportunities available in Liverpool.
Renters Rights Bill Update
The Renters’ Rights Bill has successfully passed its third reading in the House of Commons and is scheduled for debate in the House of Lords on February 4th. Set to become law later this year, the bill will usher in significant reforms for the private rental sector. These changes will reshape how landlords manage their properties, including the abolition of Section 21 ‘no-fault’ evictions, the introduction of a Private Rented Sector Landlord Ombudsman, and new regulations around rent increases.
To fully understand the upcoming changes and how they may impact your property investment strategy, read our article, which breaks down the key reforms and offers guidance on how to navigate this shifting landscape.
Old Trafford Regeneration
The Government has announced its support for the regeneration of Old Trafford and the surrounding area. At the heart of the project is the redevelopment of Old Trafford stadium, with Manchester United collaborating with Trafford Council and the Greater Manchester Combined Authority to develop plans for revitalising the region.
Manchester United is considering two options: renovating the current stadium to increase capacity from 74,000 to 87,000 or building a state-of-the-art new stadium with a capacity of 100,000. Manchester United will make the decision ahead of the summer, with 52% of the Manchester United Supporters Board backing the construction of a new stadium.
The £4.2 billion project aims to transform the area into a vibrant, mixed-use environment. It will deliver at least 5,000 new homes and create over 90,000 jobs, contributing £7.3 billion to the UK economy.
For property investors, this development presents an exciting opportunity. The Manchester buy-to-let market will become more lucrative as the area attracts an influx of people, drawn not only by Old Trafford but also by new housing and job opportunities. Short-term lets, in particular, will see increased demand due to the area’s enhanced amenities, improved transport links, and its growing appeal beyond just football and events. This regeneration promises to be a game-changer for Manchester’s property market.
Our off-market property in Trafford is ideally located, and with the news of the upcoming regeneration, is set to experience significant capital appreciation. Discover our Trafford property here.
January 2025 Property Market: A Strong Start To The Year
January 2025 proved to be a strong month for the UK property market, with many buyers eager to secure property before the new Stamp Duty threshold takes effect. This rush has led to a notable boom in activity. However, significant developments, such as the impact of the Trump Presidency and the progress of the Renters’ Rights Bill, mean that property investors must stay alert to potential shifts in the market throughout the year.
If you’re looking to refine your investment strategy or explore the latest opportunities in the UK property market, contact us. One of our experienced property investment experts will be happy to guide you toward achieving your goals.
