Why 2025 is the year to grow your portfolio

A well-managed property portfolio can provide a sturdy and reliable stream of income and significantly contribute to your long-term financial health.

If you’re ready to expand your portfolio, now is the perfect time to act.

As we progress through the year, here are some of the key reasons to invest in property in 2025:

Growth Forecasted

The UK property market is projected for significant growth, with the rental market expected to increase by nearly 21% by 2028, according to Statista. Since 2021, rental growth has gained momentum, and March 2024 saw the highest annual growth in a decade. This trend continues into 2025, reflecting a complex mix of rising mortgage rates, constrained housing affordability, and limited rental supply.

Interest Rates 

Improving Interest rates are showing signs of improvement, creating a more favorable market for landlords and investors. By the end of 2024, the Bank of England's base rate dropped to 5% from its 16-year high of 5.25%. Looking ahead, the National Association of Home Builders (NAHB) predicts mortgage rates will continue to decline, averaging 5.86% in 2025 and 5.49% by 2026.

These trends are expected to reduce financing costs, enhancing property investment profitability this year and beyond.

Supply Shortages

The rental market remains undersupplied. Although rental home availability improved by 18% year-on-year in 2024, it is still 24% lower than pre-pandemic levels.

This persistent shortage leaves renters with limited options and increases competition for homes. For investors with market expertise, this creates an opportunity to meet high demand while benefiting from favorable market conditions in 2025.

High Demand Demand for rental properties is expected to remain strong throughout 2025.

Supply shortages, combined with rising house prices and limited housing affordability, are driving this demand. Property investors can expect sustained interest and potentially higher rental yields this year.

Sources: Statista Zoopla, National Association of Home Builders (NAHB)