UK house prices saw a modest but meaningful lift in May 2025, with annual growth rising to 3.5%—up slightly from 3.4% in April—according to Nationwide. Month-on-month prices also ticked up by 0.5%, a welcome sign of stability for landlords and property investors watching the market closely as the post-stamp duty lull fades.
The average house price now stands at £273,427, up from £270,752 the previous month. But it’s not just the short-term recovery drawing attention. Over the past five years, homes in rural areas have outpaced urban counterparts by a notable margin, with values rising 23% versus 18% in more built-up locations. For landlords eyeing long-term capital growth, the countryside is clearly calling.
“Annual UK house price growth was marginally stronger in May at 3.5%, compared with 3.4% in April,” said Robert Gardner, Nationwide’s Chief Economist. “House prices rose by 0.5% month on month, after taking account of seasonal effects.”
Rural markets outperform as lifestyle shifts stick
The trend towards greener pastures isn’t just a lockdown hangover—it’s evolving into a structural shift in buyer preferences. Nationwide’s latest special report found that the pandemic-era exodus from urban areas may have slowed, but rural markets continue to outperform in price growth.
“Between December 2019 and December 2024, house prices in predominantly rural areas increased by 23%, compared with 18% in areas that are largely urban,” Gardner noted. He added that “older age groups, particularly 55+, favouring more rural areas” has driven this sustained uplift in demand.
This rural premium opens the door to new opportunities for buy-to-let landlords targeting long-term lets in countryside locations. With older, equity-rich downsizers and remote-working professionals seeking lifestyle changes, demand in less urbanised areas shows no signs of waning.
Jean Jameson, Chief Sales Officer at Foxtons, said: “The market continues to make positive strides forward… This momentum has only intensified following a renewed wave of buyer and seller activity as the stamp duty dust has settled.”
Mortgage market resilience keeps investor appetite high
Despite Bank of England rates holding steady at 4.25%, competition among mortgage providers has helped push borrowing costs down—a positive turn for landlords and homebuyers alike. According to Verona Frankish, CEO of Yopa, “the reduction in the base rate seen at the start of May has also helped to drive buyer activity… those looking to make their move continue to benefit from improving affordability.”
Foxtons’ Jameson agrees, noting that “we can expect buyer appetites to remain strong” thanks to increased lender competition. And for landlords, this means rising buyer demand and stable values—both critical ingredients for a profitable rental portfolio.
Marc von Grundherr, Director at Benham and Reeves, echoed the sentiment: “Whilst we saw the market take a momentary pause for breath… it’s clear that it’s back to business as usual… we’re seeing consistently strong growth in mortgage approval volumes, more deals done and a strengthening in property values.”
Further insights from institutional investors highlight deeper structural dynamics landlords should watch. Tom Brown, MD of Real Estate at Ingenious, pointed out that a “significant and notable shortage of housing inventory” is reinforcing rental demand across the board. “We’re seeing significant investment capital for assets for long-term rental,” he added, confirming that institutional interest continues to support market fundamentals.
Why this matters for landlords
In an environment where supply remains tight, rural prices are rising faster than urban ones, and mortgage markets remain competitive—landlords are uniquely placed to benefit. The dual trend of steady capital growth and continued rental demand bodes well for yield and long-term investment returns, especially for those positioned in areas with strong lifestyle appeal.
Nationwide’s latest House Price Index was released today: Annual house price growth edged higher in May.
