While confidence among UK property investors has softened, many remain cautiously optimistic about the long-term prospects of the residential sector, according to new data.
The research, which surveyed a range of investors across the UK, reveals a nuanced outlook: 54% plan to grow their portfolios over the next 12 months – a sign of continued engagement with the sector – but sentiment is notably more restrained than in previous years. The industry has observed a similar mindset among buyers and landlords: caution, yes, but underpinned by a general belief in the resilience and long-term value of UK property.
Mixed Sentiment, Measured Moves
The report finds that only 17% of investors expect a significant increase in residential demand in the year ahead, a marked drop from earlier surveys. A majority (61%) predict only a slight rise in demand, while nearly a quarter believe it will remain static or decline.
This “tempered optimism” contrasts with more bullish expectations in the commercial property sector, where nearly half of respondents (46%) foresee demand rising significantly.
Focus on Core Assets, Retreat from Student Housing
Despite broader market pressures, traditional residential assets like houses and flats continue to attract the most investor interest, with 54% of investors planning to increase their exposure to each.
However, student housing appears to be falling out of favour. A significant 34% of respondents say they plan to fully exit the student HMO lettings market in 2025 – up from 22% in 2024 – likely due to increased regulatory oversight and operational challenges.
Value Growth Expectations Decline
Only 14% of investors expect their portfolios to grow “significantly” in value (defined as a 20%+ rise) in the next year, a steep decline from 31% in 2024 and 39% in 2023. However, two-thirds still anticipate modest growth – indicating continued belief in property as a long-term investment.
One investor captured the prevailing mood well: “All property investors should be in it for the long term and not be impacted by short-term challenges. Looking back over the past five years we’ve experienced Covid, the energy crisis, and rocketing interest rates—but many of us are still here to tell the tale.”
The Winkworth Perspective
While macroeconomic and political uncertainty may weigh on sentiment in the short term, our experience across London and the UK suggests that well-positioned, well-managed residential investments still perform. Buyers and landlords may be more selective, but they remain active – particularly when properties offer long-term value, strong location fundamentals, or redevelopment potential.
As always, the key is quality, guidance, and a clear strategy. Winkworth is here to help navigate every step of the journey – in a market that rewards informed, strategic decisions.
Source: Primeresi, Handelsbanken’s Property Investor Report 2025
