The latest UK House Price Index released today confirms that average property prices across the country increased by 5.4% in the year to February 2025, bringing the national average to £268,000. The data, based on completed sales, signals a resilient property market that has remained steady month-on-month and continues to reward those invested in bricks and mortar.
Regional markets remain robust as interest rate cuts boost sentiment
Property values rose across all nations of the UK. England saw average prices hit £292,000, up 5.3% annually, while Scotland experienced the strongest growth at 5.7%, pushing average prices to £186,000. In Wales, house prices rose by 4.1% year-on-year to £207,000.
Jason Tebb, President of OnTheMarket, commented: “Although historic, this data shows house prices continued to rise on an annual basis in February, with the average property price £13,000 higher than a year ago.” He linked this positive trend to improved consumer confidence following “two interest rate reductions in the second half of last year and one so far this year.”
Tebb added a note of caution: “While inflation fell to 2.6% last month, it may rise again in April due to tax changes and price hikes. This could affect the Bank of England’s timetable for further rate cuts.”
Expert forecasts highlight long-term strength for landlords
The market’s annual growth rate—paired with improving mortgage affordability—is a favourable signal for landlords, especially those considering expanding their portfolios. Cheaper borrowing costs make property investment more accessible, and several lenders have recently slashed fixed-rate pricing.
Verona Frankish, CEO of Yopa, said: “Whilst house prices remained unchanged in February, we’ve continued to see positive growth on an annual basis and this is a far better measure of the ongoing improvements seen to the health of the UK property market.”
Marc von Grundherr, Director at Benham and Reeves, echoed this optimism: “The UK property market has continued to stand strong during the first few months of the year. Now that the dust has settled on the stamp duty deadline, we expect that the positivity of the first few months will only strengthen.”
Landlords stand to benefit as mortgage conditions improve
The lending landscape continues to shift in favour of property investors. According to Jonathan Samuels, CEO of Octane Capital, “Since the Bank of England first decided to cut interest rates in August of last year, we’ve seen mortgage rates trending downwards… The mortgage landscape is only expected to improve.”
Lower mortgage repayments and rising asset values present an enviable combination for landlords, especially those with fixed rental income streams. As Samuels notes, the outlook may brighten even further if global inflationary pressures force central banks into more rate reductions: “These cuts could start to come thick and fast should Trump’s insistence on global economic instability start to drive up inflation.”
Welcome signal for long-term property investors
While affordability remains a concern for many first-time buyers, the market’s current trajectory offers reassurance for professional landlords and investors. The annualised growth, relative market stability, and downward pressure on mortgage rates together support strong rental yields and ongoing capital appreciation.
As the UK heads into the warmer property months, the broader economic conditions—and the possibility of additional interest rate cuts—may further energise activity. For landlords, the combination of rising prices and improved lending terms provides a compelling case for retaining or growing their portfolios in 2025.
