Despite higher borrowing costs and cautious consumer sentiment, forecasts from Savills, Halifax, and Lloyds Bank reveal a market that remains resilient, stable, and rich with opportunity.
Over the next five years, experts predict steady house price recovery, strong rental demand, and regional markets outperforming the South. For investors, and for our Sourced Property Partners, that means potential for attractive long-term yields, especially when paired with strategic financing, professional lettings support, and smart portfolio structuring.
A Market Reset, not a Slowdown
According to Savills UK, mainstream house prices are expected to rise by around 1% in 2025; modest in the short term but marking the start of a longer growth cycle. Between 2025 and 2029, Savills forecasts a 24.5% cumulative rise, driven by wage growth, low housing supply, and improving affordability.
Meanwhile, the Halifax House Price Index shows that prices are already climbing again, up 1.7% year-on-year as of early 2025, with the UK average reaching £298,184. Transaction volumes remain below their pre-pandemic peak, but both Savills and Lloyds Bank highlight resilient buyer demand, particularly from investors who see current conditions as a time to reposition portfolios before the next upswing.
At Sourced, we see this as a period of recalibration — not retreat.
“The fundamentals of the UK market remain exceptionally strong. Our investors and franchise partners are using this phase to strengthen portfolios, diversify regionally, and prepare for the next growth wave,” says Chris Kirkwood, Director of Growth and Partnerships at Sourced.
Mortgage Stability and Strategic Financing
Savills forecasts that mortgage rates will stabilise between 4% and 5%, higher than in the 2010s, but consistent enough to restore confidence. For investors, this “new normal” supports longer-term planning and smarter funding structures, such as borrowing through Special Purpose Vehicles (SPVs) or portfolio refinancing.
With inflation expected to ease further, Lloyds Bank anticipates gradual Bank of England rate cuts in late 2025, a shift that could improve affordability and boost investment appetite. Many lenders, including specialist buy-to-let providers, are also broadening their criteria to accommodate portfolio landlords and corporate borrowers.
Through Sourced’s network, Property Partners have access to tailored mortgage products, SPV setup guidance, and dedicated accounting support, helping them make the most of this more stable environment.
Where the Growth Will Be
Savills expects regional markets, particularly the North of England, Midlands, and Scotland, to outperform over the next five years, offering better yields and lower entry costs than southern counterparts.
This aligns perfectly with Sourced’s regional investment model, which enables Partners to identify and develop projects in high-demand rental areas supported by strong employment growth and limited housing supply. These regions present a compelling opportunity for both capital appreciation and consistent rental income, backed by Sourced’s lettings, management, and investment infrastructure.
Outlook: Opportunity Through Strategy
The message from both Savills and Lloyds is clear: while 2025 may be a year of caution, it’s also a time for strategic, data-led investment.
For seasoned landlords and new investors alike, now is the moment to:
• Review portfolio structures for tax efficiency (SPVs, LLPs, or corporate ownership).
• Explore fixed-rate mortgage products while rates remain stable.
• Target high-demand regional markets for long-term capital and yield growth.
The UK housing market’s fundamentals remain strong — and with Sourced’s end-to-end support, our Sourced Property Partners are uniquely positioned to capitalise on the next property cycle.
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