If you’ve been keeping an eye on the UK property market, you’ll have noticed something big happening this year: confidence is back. In fact, a recent report by Handelsbanken shows that over half (54%) of property investors in the UK are planning to grow their portfolios in 2025. Even more striking? Eight in ten believe the value of their current properties will rise.

So, what’s behind this wave of optimism -and should you be paying attention?

Things Are Finally Settling Down

After a few rocky years of economic uncertainty, rising interest rates, and cooling house prices, 2025 is feeling a little more... steady. Inflation is calming down, interest rates have stabilised, and lenders are starting to offer more competitive mortgage deals again. For many investors, this more predictable environment is the green light they’ve been waiting for.

Add to that a new government that seems committed to building more homes, improving infrastructure, and backing regional regeneration -and it’s no surprise investors are feeling confident enough to start buying again.

The North Is Where the Action Is

One of the standout takeaways from the Handelsbanken report is just how well the North of England is performing. Cities like Manchester, Leeds, Sheffield, and Newcastle are leading the way when it comes to house price growth -and for good reason.

Property is still relatively affordable up north, rental yields are strong, and these cities are benefitting from major investment in infrastructure, transport, and employment. For investors, this means better returns and more growth potential compared to some of the more saturated markets down south.

Renters Are Driving the Market

Demand for rental properties is also showing no signs of slowing down. More people are renting than ever before -partly due to rising immigration, partly due to affordability issues around buying. As a result, rents have been climbing steadily across the country, in some areas by more than 10% a year.

For buy-to-let investors, that’s good news. It means a strong tenant pool, rising rental income, and fewer void periods -all of which make expanding a portfolio feel like a smart move right now.

What This Means for You

If you’re already in the market -or thinking about getting in -2025 could be a great time to take action. Yes, prices are rising in some areas, but there’s still value to be found, especially in regions with ongoing regeneration, good transport links, and strong rental demand.

The key is to do your homework. Focus on areas with growth potential and solid fundamentals. The market isn’t without its challenges, but for those who move strategically, this could be a year of serious opportunity.