By Yam Roka – Yeti Homes Estates
As a UK estate agent, I’m often asked: “Is property investment still worth it in 2025?” With rising costs, economic uncertainty, and countless videos on YouTube and X claiming that the property boom is over, it’s no wonder investors are nervous.
But is property investment truly dead—or just evolving? Let’s take a clear, no-nonsense look at what’s really happening.
The Challenges Facing Property Investors
There’s no sugar-coating it: the current property landscape is tough. Several factors are putting pressure on landlords and investors:
- Higher Taxes: In the October 2024 budget, the Stamp Duty Land Tax (SDLT) surcharge on second homes rose from 3% to 5%, making it more expensive to grow a property portfolio.
- Reduced Tax Relief: The phasing out of mortgage interest tax relief continues to hit small landlords hard. Many are exiting the market, which is shrinking rental supply and pushing rents higher.
- Persistent Inflation: As of May 2025, inflation stood at 3.4%—above the Bank of England’s (BoE) 2% target. With projections of 3.7% inflation by September (driven by rising energy and utility bills), the BoE kept the base rate at 4.25% in June 2025.
- Rising Borrowing Costs: Buy-to-let mortgage rates now range between 4% and 6%. For a £200,000 loan, just a 1% increase means an extra £2,000 per year in repayments—directly cutting into investor profits.
These challenges, combined with sensational headlines and viral “property crash” videos online, have understandably made many investors cautious.
Why Property Investment Still Works in 2025
Despite the headwinds, the fundamentals of UK property remain solid—and for savvy investors, this could be a time of opportunity:
- Chronic Housing Shortage: The government’s target of building 370,000 new homes per year is unlikely to be met. This ongoing shortfall keeps supply tight and rental demand strong.
- Rising Rents: In December 2024, UK rental prices rose 9% year-on-year, outpacing wage growth. This trend gives landlords a strong rental yield, even with increased costs.
- Potential Rate Cuts: BoE Governor Andrew Bailey has signalled that gradual rate cuts may come later in 2025. Some analysts predict a base rate of 3.75% by year-end, which would ease mortgage costs and potentially lift house prices as buyer demand picks up.
- Energy-Efficient Homes in Demand: Tenants increasingly prefer properties with high EPC ratings. Upgrading to greener homes can attract better tenants, command higher rents, and future-proof your portfolio as regulations tighten.
My Take: Property Investment Isn’t Dead—It’s Just Different
In my view, property investment in 2025 isn’t dead—it’s evolved.
Gone are the days of easy profits with minimal effort. Today’s market demands a smarter strategy:
- Focus on high-yield areas.
- Be selective about what and where you buy.
- Factor in running costs and future-proofing for regulation changes.
- Consider energy efficiency as part of your ROI planning.
For new investors, the entry barriers are higher. But with proper guidance, the UK housing shortage, population growth, and long-term market stability make property a more resilient asset than many others.
Let’s Help You Get It Right
At Yeti Homes Estates, we’ve been navigating the property market through this transition as a property professional. Whether you’re looking to buy, sell, rent, or manage a property, we offer personalised, expert support every step of the way.
Contact us to maximise your property’s potential and take the stress out of your investment journey.