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The UK property market has been on a strong footing in 2025. Both property prices and rental demand are on the rise, while longer tenancies are becoming increasingly common. For UK expat and foreign national investors, these trends offer reassurance that the buy-to-let sector remains one of the most resilient and rewarding investment avenues, particularly for long-term wealth generation.
Confidence Returns to the UK Property Market.
After a period of economic uncertainty, investor confidence in the UK housing market is growing once again. According to Halifax’s latest house price index, the average UK house price climbed to a record £299,138 at the start of 2025, up 0.7% month-on-month and 3% year-on-year.
This renewed growth has been bolstered by the Bank of England’s decision to reduce the base rate to 4.0%, the lowest level since February 2023. The rate cut is expected to further boost affordability, with mortgage rates now hovering between 4% and 5%. As borrowing costs ease, more buyers and investors are re-entering the market, helping to sustain healthy levels of demand.
Longer Tenancies Support Steadier Returns.
Alongside steady price growth, a key development strengthening investor confidence is the lengthening of average tenancies. New data from the Deposit Protection Service (DPS) shows that tenants are now staying in their rental homes for an average of 910 days (around 2.5 years). This marks the longest average tenancy length ever recorded and represents an increase of 121 days compared with 2024, continuing a multi-year trend of tenants staying put for longer. There are several factors behind this shift:
- Rising rents and moving costs are encouraging tenants to remain in their current homes.
- Limited rental supply means suitable alternatives are harder to find.
- Improving tenant-landlord relationships are leading to greater stability and satisfaction.
For landlords, these longer tenancy periods translate into fewer voids, lower turnover costs, and more predictable income, all of which contribute to stronger, more passive returns from their buy-to-let investments.
North of England Continues to Lead Value Growth.
While the UK property market as a whole has been buoyant, growth remains strongest across the North of England and parts of Wales. Halifax data shows that the North East and North West recorded the fastest annual price increases, with values up 5.2% year-on-year in the North East alone. ‘These regions remain a particular focus for many UK expat and foreign national investors that we’re speaking to’ says Stuart Marshall, CEO of Liquid Expat Mortgages. ‘This is because of their affordability, high rental yields, and steady tenant demand, which make them a prime target for both capital appreciation and consistent rental income. This is a continuation of the North-South divide that we’ve seen emerge over recent years: as prices in prime southern markets slow, regional cities like Manchester, Liverpool and Leeds are performing exceptionally well’.
A Market of Long-Term Opportunities.
Despite the challenges of higher interest rates in recent years, buy-to-let continues to prove its long-term resilience. Recent research from the Intermediary Mortgage Lenders Association (IMLA) predicts that buy-to-let lending will rise by 25% cumulatively by the end of 2026, driven by improved affordability and ongoing rental demand. Meanwhile, a study from the TDS Charitable Foundation found that 37% of landlords now earn more than £100,000 per year before tax, up from 20% a year earlier and a clear indication that many investors are not only weathering market changes but actively growing their profits.
A majority of landlords continue to view property investment as a long-term wealth strategy, with rental income and capital growth working in tandem to generate sustained financial returns. For many UK expat and foreign national investors, property remains a more stable and tangible asset compared to equities or savings, particularly in times of inflationary pressure.
Demand Continues to Outstrip Supply.
One of the defining features of the UK property and rental markets remains the persistent imbalance between supply and demand. Even with a gradual increase in housebuilding and rental listings, the number of available properties continues to fall short of the demand from tenants and buyers alike. ‘This shortage is keeping both rental yields and capital values elevated, reinforcing the UK’s appeal as a long-term investment destination particularly for overseas investors looking for a stable market with predictable returns’ says Stuart.
Strong Tenant Demand Reinforces Market Stability.
The DPS survey also found that tenant demand has risen or remained stable for the majority of landlords, with 30% reporting a rise and 13% saying demand has more than doubled over the past year. Despite higher rents, fewer tenants are experiencing financial hardship, thanks to rising wages and easing cost-of-living pressures. These dynamics suggest a healthier, more sustainable rental market, where tenants are more secure, and UK expat and foreign national landlords benefit from reduced churn and steadier income streams.
Expert Guidance for Investors.
For UK expat and foreign national investors, the current market conditions offer compelling opportunities. The combination of longer tenancy durations, improving affordability, and continued value growth means that well-chosen buy-to-let properties can deliver reliable, long-term returns. At Liquid Expat Mortgages, our specialist advisers can help you to make the most of these conditions. Whether you’re purchasing your first UK investment property or expanding an established portfolio, we can guide you through the process of securing the most suitable buy-to-let mortgage, including options for limited company structures and other popular investment methods.
Get in touch with our team today to explore how you can benefit from the strength and stability of the UK’s property market in 2025 and beyond.
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Rd,
Haslingden, Rossendale
BB4 5HU
Phone: 0161 871 1216
www.liquidexpatmortgages.com
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