2025 looks set to be (another) challenging year for the property market. Affordability is still a key issue with house prices being affected across the country because of higher mortgage costs.
As a result, estate agent Savills has suggested that there will be a 4% average increase in property prices across the whole of the UK in 2025, compared to the 2.5% increase predicted by Knight Frank.
The latter flags that “the more affordable markets in the north” will experience the strongest house price growth in the coming years, with the North West, North East, Yorkshire and the Humber, and Scotland all predicted to see house prices rise be 5% next year.
In contrast, the South will experience much lower growth. The South West and East of England will see prices up by 2.5%, with London and the South East only faring marginally better with a 3% growth.
While this research shows what’s happening at a regional level, we asked five property experts for their take on where to buy in the UK next year.
With Labour adding VAT to school fees from 1 January, effectively increasing the costs of private schooling by 20%, an increasing number of buyers will be looking for areas with outstanding state schools.
“The increase in VAT on private school fees is already making waves in the property market. Families looking to offset costs are beginning to downsize or relocate to areas with outstanding state schools,” says Sarah Walker, independent estate agent in Richmond.
“This shift will undoubtedly create hotspots around top-performing state schools, driving up competition and prices in these catchments.”
With many priced out of the South and South East, the North offers great value for money, whether you’re a landlord or owner-occupier.
“The North remains a goldmine for value in 2025,” says Walker. “Cities like Manchester and Leeds are still seeing strong rental yields, while areas surrounding them — such as Bolton and Huddersfield — offer relatively affordable prices with the potential for capital growth.”
Wherever you are in the country, North or South, commuter towns are a great option in 2025. Their combination of local amenities, spacious homes and slick transport links mean they tick all the boxes for buyers.
“Commuter towns like Reading, Slough, and Basingstoke provide great opportunities as workers gravitate back towards hybrid or full-time office roles, pushing up demand,” says Walker.
“They’re benefiting from the post-pandemic hybrid work model, which allows buyers to live further out without sacrificing job access. Suburbs are next in line, with growing demand for family homes pushing prices up, particularly where schools and amenities are strong.”
Mark Crampton, of Middleton Advisors expects “smart, walkable towns and cities, like Bath, Norwich, Guildford or Petersfield, with decent amenities” to be popular in 2025.
Vincent Dennington at John D Wood says: “Surrey remains as desirable as ever, often referred to as the ‘Beverly Hills of the UK’. The Surrey-Hampshire border is an area to watch, particularly towns such as Farnham and Camberley, which are slightly under the radar.”
In London, new hotspots are popping up. Marc Schneiderman of Arlington Residential highlights areas just outside those already established as prime locations. “We believe Kentish Town will see huge growth in the coming years. There is significant development and regeneration in the planning pipeline, and it is close to prime/established locations such as Hampstead and Primrose Hill.”
Over in the East, Oliver Sanhaji of Middleton Advisors says: “Stoke Newington (N16), Finsbury Park (N4), and Lower Clapton (E5) will have the largest margins available.”
“Overlooked pockets in outer zones like Croydon and Enfield may surprise buyers with their mix of affordability and excellent transport links,” predicts Walker. “Richmond upon Thames, although not ‘cheap,’ offers superb long-term returns as buyers value green spaces and quality of life.”
While the countryside has fallen back in popularity since the pandemic, areas that are well-connected still remain attractive to those who want the extra space but still have to commute into London regularly.
“The countryside, once the darling of pandemic-era buyers, is cooling as rising interest rates make sprawling, high-maintenance properties less attractive. That said, well-connected, rural locations or small market towns still offer great opportunities if you know where to look,” says Walker.
In particular, Crampton highlights the Maidenhead area, Farnham, Guildford, Dorking and Sevenoaks. “Houses in the countryside always look good value when compared to London prices. Family houses close to a train station within 40-50 minutes of London make a lot of sense as a medium-to-long-term investment.”
Despite the Savills figures, our experts thought that the Southwest still offered a solid prospect. It has long suffered from its poor connectivity, but this means it you can get much more for your money if you don’t need to commute.
“Parts of the Southwest offer excellent value, particularly in Devon and Cornwall, where there is strong demand,” says Dennington.
Walker flags that this market isn’t typical of the rest of the country, with restrictions on second homes hitting hard. “Cornwall and Devon are still holding appeal for second-home buyers, though the market there is cooling slightly due to tighter regulations on holiday lets.”
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