The pathway for UK property values remains under pressure as 2025 unfolds, with forecasts suggesting the downturn could stretch longer than seen in recent Western markets. A prominent national business newspaper references projections from the consulting firm Oxford Economics to underline the trend.
Access to affordable housing may continue to narrow as mortgage costs rise in tandem with higher bank interest rates. Analysts predict prices could fall further through 2025, with the estimated contraction around 11 percent relative to the peaks recorded last year, reflecting the impact of tighter lending conditions and higher financing costs.
Looking beyond the United Kingdom, eyes turn to the United States, France, Germany, and Italy, where real estate prices are expected to stabilize and begin climbing within the year, sustaining momentum into late 2024 according to current outlooks cited by market observers.
Earlier observations from major industry data points suggest demand for UK housing cooled markedly, with market activity reaching levels not seen since the peak pandemic period in 2020. Between July and September 2022, weekly home sales in the UK dropped significantly compared with the same quarter of the prior year, signaling softer demand amid economic headwinds and rising financing costs.
Additional industry commentary indicated a notable year over year rise in UK property prices during mid-2021, marking a high not seen since the end of 2004. This snapshot, drawn from official statements, highlights the volatility that has characterized the market in recent years and the subsequent shift as lenders recalibrate terms under tighter monetary policy.