You’re probably wondering what the property market will look like in 2025. With house prices constantly going up and down, it’s tricky to predict where they’ll be in just a few years. But here at iThink, we’ve analysed all the data and have some insights into where the market could be heading. From changes in buyer preferences to new building techniques, the property landscape is set to evolve. We’ll give you our predictions on house prices, popular locations, buyer demographics and more. What does the future hold for homebuyers and homeowners? Read on to find out our 2025 forecasts and whether it’s a good time for you to buy or sell.

The Property Market in 2025: What Can We Expect?

Increased Automation

In just a few years, the property market will likely become far more automated. Everything from virtual viewings and electronic contracts to AI-based valuations and automated conveyancing. This increased use of proptech will streamline the buying and selling process, reduce costs and make the overall experience more convenient.

Continued Strong Demand

The demand for housing isn’t going away anytime soon. Population growth and societal changes like later marriages and smaller household sizes mean we need more properties. While house prices may fluctuate, the long term trend is for values to rise in line with inflation at a minimum. Areas with strong local economies and job opportunities will likely outperform the national average.

Adjusting Interest Rates

Mortgage rates have been at historic lows, but many experts expect incremental interest rate rises over the next few years. The market will need to adjust to slightly higher borrowing costs, though rates are still forecast to remain relatively low by historical standards. Fixed rate deals may become more popular to provide payment stability.

Help for First-Time Buyers

Governments frequently tweak schemes like Help to Buy to assist new homebuyers. Additional options for low-deposit mortgages and shared ownership are also making it easier to get on the ladder. While property prices are rising, supporting first-time buyers will remain a priority to aid younger generations looking to become homeowners.

The property market of 2025 and beyond will likely be quite different from today. Though technology and automation will significantly impact how we buy and sell, property will always remain a tangible investment and the desire to own a home of one’s own will endure. With a range of government initiatives and an adaptable private sector, the market is well-positioned to continue meeting the nation’s housing needs for the long term.

Key iThink Property Predictions for 2025

The housing market is always changing, but the next five years are set to bring some major shifts. Here are our key predictions for what the property landscape will look like in 2025:

Growth of Smart Homes

Smart home technology will become mainstream by 2025. Things like smart thermostats, smart locks, and smart security systems that can be controlled remotely are already popular, but over the next few years advancements in artificial intelligence and voice assistants will make smart homes the norm.

Rise of Generation Rent

The number of renters, especially younger people, will continue to increase. House prices have risen faster than wages, making it difficult for many to buy their first home. The flexibility and lower costs of renting also appeal to younger generations. The private rented sector will expand to meet this demand.

Increase in Retirement Housing

As the population ages, demand for retirement housing and care homes will rise. Purpose-built retirement communities with amenities, healthcare facilities and assistance for older residents will become more common. Intergenerational living may also increase, with older homeowners renting spare rooms to students or young professionals.

Growth of Sustainable Homes

There will be a greater focus on sustainability and energy efficiency in new builds. Solar panels, heat pumps, LED lighting and high-performance insulation will become standard. Sustainable building materials like bamboo, cork and reclaimed wood will also gain popularity.

The property market is primed for change. While the future remains uncertain, paying attention to these key trends can help buyers and investors make the most of opportunities in 2025 and beyond. The future is smart, green and flexible.

How Will Technology Impact Real Estate in 2025?

In just a few short years, technology will significantly transform how we buy, sell and invest in real estate. As an industry that has traditionally been slow to adapt to change, real estate is poised for major disruption by innovative proptech companies.

Virtual and Augmented Reality

By 2025, virtual reality and augmented reality will allow buyers to tour properties from anywhere in the world. VR headsets will provide an immersive experience where you can explore homes as if you’re really there. AR apps will let you see virtual furnishings, decor and renovations superimposed on your living space. This will make house hunting more efficient and convenient for both buyers and agents.

AI and Automation

Artificial intelligence and automation will handle many of the routine tasks currently performed by real estate agents and brokers. AI chatbots will field basic questions, schedule showings and handle paperwork. Automated valuation models will provide home price estimates. These technologies will free up agents to focus on high-value work like negotiating deals and providing expertise to clients. However, many jobs may be eliminated as a result.

Big Data and Predictive Analytics

Access to huge amounts of data and advanced analytics will give real estate professionals a glimpse into the future. By examining market trends, demographics and economic factors, software can predict how neighborhoods and property values may change over time. This could help investors identify up-and-coming areas and make strategic long-term decisions. However, biases and inaccuracies in the data and algorithms could negatively impact some communities.

While technology will significantly transform real estate over the next few years, human judgment, expertise and relationships will remain essential. Tech-savvy agents who combine the latest tools with high-touch client service will be poised to thrive in 2025 and beyond. Amid a sea of disruption, the real estate professionals who embrace innovation while staying focused on their clients’ needs will be the ones who successfully navigate the changes ahead.

Top Locations Set for Growth by 2025

The Northern Powerhouse Cities

Cities in the North of England like Manchester, Liverpool and Leeds are predicted to see strong house price growth over the next few years. Major investment in infrastructure, business and culture has boosted the appeal of living in these cities. Improved rail links mean commuting to London is now a viable option for many. House prices in Manchester have risen by a third in the last five years, and this trend is set to continue as more people are attracted to the city’s buzzing social scene and job opportunities.

Midlands Engine

The Midlands Engine project aims to boost economic growth in the East and West Midlands. Cities like Birmingham, Nottingham and Leicester stand to benefit, with increased investment in business, transport and lifestyle. Birmingham’s status as a major business hub, combined with its relatively low living costs, make it an appealing city for young professionals. The 2022 Commonwealth Games will also put Birmingham in the spotlight, likely driving further interest in the city’s property market.

South West

Areas of natural beauty like Cornwall, Devon and Dorset have always been desirable places to live. Improved rail links are making the South West more accessible, while the rise in remote and flexible working means more people can now work from home some or all of the time. Coastal towns offer a relaxed lifestyle at (currently) lower prices than other scenic parts of the UK. However, increased demand may lead to sharper price rises here over the next few years.

The UK property market is diverse, with many areas of potential growth. While London has long dominated, regional cities and towns are now becoming popular lifestyle and work destinations in their own right. With major investment in infrastructure improving connections across the country, more people will likely take advantage of job opportunities and lower living costs outside of the capital. By 2025, this trend is set to drive house price growth in key locations across England.

FAQs: Your 2025 Property Market Questions Answered by iThink

Will house prices continue to rise in 2025?

House prices have steadily increased over the past decade, despite some peaks and troughs. We predict house prices will continue to rise in 2025, but at a more moderate pace. Low interest rates, high demand and limited housing stock will put upward pressure on prices. However, increasing costs of living and potential economic uncertainty may curb price growth. On average, we expect house prices to increase 3-5% in 2025.

Should I buy or rent in 2025?

Whether to buy or rent in 2025 depends on your own personal circumstances. Buying a home offers potential for capital gains and stability. Interest rates are likely to remain low, making mortgages more affordable. However, house prices will still be high relative to incomes. Renting provides more flexibility and lower upfront costs. Rent prices may rise slightly in 2025 but at a slower pace than house prices.

What locations and property types will be in high demand?

We expect strong demand for affordable properties within commuting distance of major cities and jobs hubs. Suburban areas and small regional towns are likely to be popular. Properties suitable for families, downsizers and remote workers will be in demand, such as three-bedroom houses, townhouses, apartments and units.

Will interest rates go up in 2025?

Interest rates are unlikely to increase substantially in 2025. The Reserve Bank aims to keep rates low to support economic growth and job creation. However, if inflation starts rising above the target range, the RBA may consider minor rate hikes. Investors should budget for interest rates to potentially increase 0.25-0.5% in 2025. Fixed rate mortgages may provide a buffer against potential rate rises.

Overall, the 2025 property market is shaping up to provide opportunities for both home buyers and investors, despite some uncertainties. Keeping a close eye on key factors like interest rates, employment, migration and housing supply in your local area can help in making the best property decisions. The future remains unclear, but with prudent decisions today you can feel optimistic about 2025.

So, there you have it – some of the keyways that the property market could shape up by 2025 according to the experts. While no one can say for sure what will happen, the predictions give us plenty to think about when it comes to buying, selling or investing in property in the coming years. Whether you’re a first-time buyer trying to get on the ladder, looking to upsize as your family grows, or an investor seeking your next project, being aware of these potential trends will help you make informed decisions. The market always has its ups and downs but by staying adaptable and keeping your long-term goals in mind, you can put yourself in a good position to take advantage of opportunities as they arise. For now, let’s watch this space and see what 2025 has in store for the world of real estate!

Bella