Property Market Update 2025 – Interest rates & more
Introduction
Many homeowners, Landlords and Tenants are currently feeling the impact of rising rates. Whether it is increases to utilities, rent, mortgage fees and of course, interest rates…
So, what is the outcome of such different conditions than what the UK was previously used to? We will explain this below, taking a look at the property industry over the course of the last 25 years to see how things have changed, or even gone back to a previous time.
Interest Rates
Bank of England interest rate chart from roughly 1985 –
Credit: UK Interest Rate History / Graph (propertyinvestmentproject.co.uk)
The chart shows the differentiation in rates over the last few decades. As you can see, rates appear to be on an uptrend over a recent period. Although, this is still much better than once upon a time. The main question is, will rates continue on the path they are currently on and if so, what this will mean for the market.
The next Bank of England release of new bank rates will be confirmed on March 23rd 2023. We should expect continued increases to the base rate, with recent rates going up and no clear news to show otherwise. This has caused a ripple effect to the housing market, some areas indicating this much more than others. Rutland, UK is predicting a 19% decrease in buyer demand this year with other regions such as:
- Herefordshire: 18%
- Leicestershire: 17%
- Lincolnshire: 17%
- North Yorkshire: 16%
It’s hard to tell right now, how the UK as a whole will be impacted. It isn’t all bad news, we’ve seen other areas continue to increase with steady and fast growth. Most likely due to factors like good rental yield for an investor, desirable locations with relatively cheap house prices and popular cities and suburbs, where large corporations and businesses are situated.
Nottingham Housing Market
House prices in Nottingham overall, see an average price of £244,678 over the last year. Terraced properties being the lower end of the spectrum at an average of £175,164. This is a 2% increase over the year with 2020 showing a 10% increase. Getting onto an opinion based response to this, we believe Nottingham house prices will continue to rise at a slow rate with demand still seemingly not decreasing. Houses have seen reductions on rightmove and there is a chance this data might paint a clearer picture in months to come, on whether the local market has taken a hit or if prices have on average increased.
Nottingham Rental Market
We are a Letting agent in Nottingham and this is our review of the local market here. The below survey recorded between 2021 and 2022, show a large uptrend in rental prices with this indicating a growth of £41 per year for average rents. We expect this to keep growing in the way it is, with demand soaring…
An example of this, we were advertising a one bedroom apartment in the city centre, this had 30+ enquiries and after 10 viewings in one day, went to one of the applicants. This is an incredible demand versus supply with only a few residential developments being constructed in the city, we anticipate this competitive market to continue as it is.
Credit: Nottingham Rental Market | Stats & Graphs (varbes.com)
Conclusion
In conclusion, house price decreases are varying throughout the UK for numerous factors. Interest rates even though they are high, the data indicates we are still at a lower rate and have been fortunate to see record low rates in recent times. This could get worse, resulting in homeowners and Landlords selling up due to unaffordable costs which would mean a significant drop to house prices in Nottingham and all areas. However, it is not all doom and gloom, prices may drop but the UK property market has shown to pay off with house prices over a longer period proving to be a great investment. So, if you are looking to purchase in Nottingham or surrounding areas, get in touch with Harmony Lets today to see how we can help.
