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December 2025 saw a softer close to the year for the UK property market, with modest house price growth and steady rental inflation, even as buyers and investors approached the festive season with caution.
Market Snapshot & Key Figures
- House prices: Nationwide reported UK house prices rose just 0.6% year-on-year, with month-on-month declines in many regions as seasonal slowdown set in. Rightmove’s data showed asking prices softened in December, with growth well below the long-term average of ~1%.
- Rental inflation: Private rents remained resilient, with average UK rents up 4% y/y, highlighting continued demand in the private rented sector.
- Monetary policy: The Bank of England cut Bank Rate to 3.75%, reducing borrowing costs and creating opportunities for refinancing or new acquisitions.
- Market sentiment: Transaction volumes dipped slightly as buyers remained cautious ahead of year-end and uncertainties around affordability persisted.
What This Means for Investors
December’s figures indicate a market in steady state rather than sharp growth. House prices are still rising, but modestly, while rental growth continues to support income yields. Mortgage costs are slightly lower, but caution among buyers may open doors for strategic investors.
- Income-focused opportunities: Strong rental demand means cash-flow properties, HMOs, and student housing remain attractive, even if capital growth is slow.
- Location is key: Prime areas and constrained supply markets continue to outperform.
- Financing matters: Lower rates make refinancing or securing competitive fixed-term mortgages advantageous.
- Negotiation potential: With some sellers under pressure and buyer sentiment subdued, motivated negotiations are possible.
December demonstrates the market’s resilience: small growth, strong rents, and opportunities for disciplined investors.
Review your portfolio with Elborn Property Group and position your investments strategically for 2026.
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