May 2025 saw a sustained period of change in the property market, redefining the UK’s landscape for the rest of 2025 and the future. With major economic shifts and new infrastructure developments creating brand new opportunities for property investors to capitalise on, May 2025 has been an important month for the property market. In this monthly news round up, we will explore the month’s key events and what impact this has on property investors.
Interest Rates Slashed to 4.25%
The Bank of England cut interest rates to 4.25%, a 0.25% reduction. This marks a continuation of a gradual easing of monetary policy following previous cuts, with this being the fourth interest rate cut since the start of 2025.
This is encouraging lenders to cut their mortgage rates, and motivating people to borrow, as a result. Buy to let mortgage rates are being cut, with major lenders offering below 4% deals. HSBC, for example, offers a buy-to-let mortgage on 60% LTV and a 3.74% interest rate, with a £3,999 fee on a two-year fixed rate deal.
The interest rate cuts, with more set to come over the remainder of the year, is priming the economy for buy-to-let investors to benefit. With more favourable borrowing conditions and mortgage rates on offer, property investors can enter markets with increasing confidence.
Now may be the best time to fix your buy-to-let mortgage. Read here to find out why.
UK Homeowners Selling For Below Market Value
Zoopla have reported that homeowners are selling for around £16,000 below the average asking price. More properties have come to market in May, with sales climbing 6% from last year.
This is the fastest rate of sales in four years, and is only aided by the favourable economic conditions created by the declining interest rates. Buyers can now borrow up to 20% more than they could last year.
Zoopla also noted that the average cost of a UK home has increased from last year, with the average price now being £268,250. This is an increase of £4,330 from 2024. The strongest annual price is in the North West, in areas such as Manchester and Liverpool pushing up values.
Liverpool house prices have risen by 3% and Manchester house prices have increased by 2.5%. These areas offer great value to investors, due to their lower than average property prices and promising levels of capital growth due to the ongoing regenerations in these cities.
Liverpool Infrastructure Developments
Liverpool to Manchester Railway Gateway Station
The two North West mayors Steve Rotherham and Andy Burnham have announced plans for a new railway connecting Liverpool and Manchester. The new railway would act as a ‘northern arc’ between the two cities, and would drastically reduce travel time between the two cities to around 20 minutes. The government has pledged £12 billion to the project.
The route will encompass the Liverpool City Region, Cheshire, Warrington, and Greater Manchester, covering an area of 5.4 million people. The current route takes 53 minutes for a distance of less than 40 miles. The new line would help improve the number of trains travelling to and the capacity on the trains. Liverpool Central Station would also undergo significant redevelopment under the plans.
This could kickstart a £90 billion economic transformation across the North West. Creating 22,000 new jobs, the project will begin construction in the 2030s and be ready by 2040.
This will improve Liverpool’s appeal, with stronger commuter links and increased connectivity to its closest neighbour in Manchester. This is a key scheme in regenerating the North West and will be a prime contributor to the capital growth of property prices in the region.
Liverpool to Wrexham Line
A new direct rail service will connect Liverpool city centre to Wrexham, improving access between Merseyside and North Wales. The planned route is expected to be fully operational by 2035, with potential integration into wider regional networks, including onward connections to Manchester.
This initiative marks a continued commitment to expanding Liverpool’s public transport network and fostering stronger economic and social ties with North Wales. By enabling fast, direct travel to this increasingly popular destination, the project is set to increase tourism, ease commuting, and open new opportunities for cross-regional collaboration.
Short-term lets in Liverpool could become more popular as a result of this direct link. The ease of access will encourage people from North Wales to visit the city, and will need temporary accommodation during their visit. Property investors could position themselves to capitalise on this already popular trend. Liverpool is one of the most popular tourist cities in the UK, and the Wrexham link will only increase its popularity.
Inflation Rises
Inflation rose to 3.5% in April. This is 2.6% increase from February. The Bank of England forecasts a peak of 3.7% between July and September 2025, before gradually declining through 2027.
While interest rates have dropped, the Bank may have to increase them again if inflation continues to rise above the projections. Investors should remain calm, but this emphasises the importance of investing now while interest rates are low, and is a good reason why you should fix your buy-to-let mortgage now.
Click here to learn more about how inflation and the property market are linked.
Rightmove and Nationwide Launch New Property Purchase Tool
Rightmove and Nationwide have launched a new house buying tool that is designed to make the purchase process more efficient. The tool provides potential buyers with a real time digital check about the mortgage eligibility of a specific property before they have viewed it.
The tool helps point out possible issues like flood risks or short lease terms that could make the property difficult to finance. This helps buyers become aware of any issues before locking into any deals for the property.
This is part of Rightmove’s mission to digitise more of the UK property market and provide property buyers with more agency.
This is helping modernise the market and will be a tremendous benefit to buy-to-let investors. When identifying properties, buy-to-let investors can find out any issues and can find out whether the property is eligible for a buy-to-let mortgage. This can save investors a considerable amount of money and help steer them toward properties more tailored to them.
May 2025 Property Market: Creating an Exciting Second Half to 2025
May 2025 has ushered in key changes that are shaping the direction of the UK property market. With lower interest rates, improved infrastructure plans, and exciting new technology to aid the property buying process, investors have new opportunities to refine their strategies. House prices remain stable and affordable areas continue to show promise, particularly for long-term investors.
If you’re looking to explore the latest market opportunities, Advantage Investment is here to provide guidance on how to align your strategy with the current trends in property. Contact us today and we will connect you with one of our property experts.
