Q3 2025 REVIEW
The third quarter of the year has been generally busy in terms of property sales but this has gone hand-in-hand with price sensitivity. Amid rising competition, sellers have been forced to adopt more realistic pricing, which has had a braking effect on rates of capital appreciation. Nevertheless, the market has remained stable and active, and numerous reputable organisations have forecast continuing but restrained price-growth over the next 12 months.
Faced with conflicting rental data, it is hard to gain an accurate impression of the supply/demand balance in the lettings market. However, it does seem evident that rental values are rising at a good, sustainable rate in some regions, and that average yields remain very good right across the country.
Market conditions as at the end of Q3 can be summarised as follows:
· Capital growth rates vary considerably by region.
· Poor growth rates in London and the South have dragged down the UK average.
· Rental growth rates have also shown significant regional variations. Again, growth has tended to be weakest in the UK’s more expensive southern markets.
· Yields are generally rewarding in real terms; average regional results lie in a relatively narrow band between approximate 6% and 8%.
· Inflation is still well above target.
· Interest rates are unlikely to move much in the coming months, though a further cut in the base rate is conceivable.
· Average earnings are continuing to rise faster than inflation.
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