Transcription
Don't buy UK property in 2025 until you've watched this video.
Hi, my name is Simon Zuchi. On one hand, 2025 is going to be an amazing time to buy property, but on the other hand, I know many investors are going to make some very expensive mistakes.
In this video, I'm going to explain what some of the opportunities and challenges are so you're prepared to make the most out of the 2025 property investing UK market.
Look, I've been investing in property since 1995. I've been a founder of the Property Investors Network, which is the largest network of property meetings around the UK, with 50 plus meetings in the UK and a couple in the Netherlands as well.
I'm the author of "Property Magic," the number one Amazon bestseller, and I've been helping people like you become successful investors for the last two decades. I always see people who are new to the market coming and making expensive mistakes, and I help you avoid those.
Even if you've been investing for a while, there are a couple of things you need to understand about the 2025 property market that are going to affect your investing decisions.
So, there are three areas I want to talk about. First of all, let's talk about the strategy you use. Most people, when they invest in property, buy what we call single let properties. This way, you have a property—it could be a house or an apartment—and you rent it on one contract to an individual, a family, or a couple.
The tenants look after the property; they've got to pay the bills, etc. But you, as a landlord, are responsible for insurance and also for maintenance of that property. If something goes wrong, you need to get that fixed.
Now, a lot of people like single properties because they're very low maintenance and very low hassle. You know, letting agents look after it, and that's what the vast majority of people think is property investing.
The big problem with doing that is right now, in 2025, with relatively high property prices compared to the last 20 years or so—because prices generally go up in the UK, as we live on this island with a limited amount of accommodation and an increasing population—there are relatively high prices.
But most importantly, interest rates are quite high. What that means is many single properties don't stack up when you look at the amount of income that comes in each month from that property.
When you take off the insurance, management fees, and the mortgage, there's often not a lot of money left over. All you need is a boiler to go wrong, and that can cost you hundreds of pounds to fix or even thousands, which could chew up lots of your profit.
So, don't buy property in 2025 if you're going to do single lets. Generally, I don't think they work very well.
So, what do you do instead? Well, there are two main strategies you could use that create much higher cash flow than single let properties. They are my personal favorite: HMOs (houses of multiple occupation), where you rent out individual rooms in a property to students, young professionals, or working people.
They pay a certain amount of rent that covers all the bills, and it's far more cost-effective for them than living in a studio on their own, where they pay the rent and the bills.
But also, it's more profit for you as the property owner because you have all this collective rent, which, even after you've paid the bills, is a lot more than you would get on a single let property.
Now, it is a bit more work, and there are things you need to understand, such as licensing and planning, etc. But once you understand those things, you can make a lot of money doing HMOs.
Instead of making £200 per property, you should be making at least £1,000 per property. What that means is you don't need that many properties to replace your income, which is why many people invest in property.
The other really good high cash-flowing strategy is called serviced accommodation or short-term rentals. That's where you take a property and rent it out, not for a six or 12-month period, but often for a couple of days at a time, maybe several weeks or several months.
But it's not a normal rental contract; it's short-term, and you actually provide extra services. Unlike a normal property where the tenants would do their own cleaning and laundry, in serviced accommodation, it's a bit more like a hotel.
You're providing the laundry, the cleaner, etc., to make it look and feel like a hotel, along with a few extra services like that.
Now, again, you get a much higher rental income. My personal preference out of HMOs or serviced accommodation is actually HMOs for two reasons.
First of all, serviced accommodation can be very, very profitable, but the income tends to go up and down. You can have some months where you make a lot and some months not so much. I prefer the stability and predictability you get with HMOs.
The other factor that's really important is that right now, in 2025, I believe there's a bit too much supply of serviced accommodation Airbnb units.
Now, that's going to change because regulation is coming to England about serviced accommodation, and that's going to force a lot of landlords out of the market.
So, less people offering the accommodation means less supply, which means prices are going to go up. I think serviced accommodation might be a great business for the end of 2025 into 2026.
Right now, I think HMOs are probably the best strategy for that high cash flow.
So, that's the first point I wanted to make: if you're buying property in the UK, make sure you're using a strategy that's going to give you really good cash flow.
The second point I want to make is interest rates. Now, let's talk about what's happened historically.
When we had the global financial crisis back in 2007 to 2008, we had a massive property crash all around the world. A lot of banks lost a lot of money and were bailed out by governments.
What happened was that the interest rates actually came down massively, and for about a whole decade, we had a Bank of England base rate at half a percent.
Then COVID came, and we had this unexpected boom in property prices. There was a lot of money spent by the government on bounce-back loans and all these kinds of things like furlough.
What that meant was a lot of money was put into the economy, causing inflation. So, as property prices went up, we had inflation.
The Bank of England used interest rates as a macroeconomic tool to control inflation. When inflation goes up, they generally raise interest rates to slow down the economy and bring inflation down.
Their target is actually 2% for UK inflation. They want to have some growth, but they don't want it too much.
After COVID, we had double-digit inflation, so it's understandable the Bank of England put base rates up to 5.25%. This meant many people on mortgages were paying a lot more every single month than they were previously.
Many landlords were making no money or even losing money on their property. That's why so many landlords have been selling, and many homeowners might have come off a fixed-rate mortgage onto a variable rate and had a big shock when their home mortgage doubled or even tripled in price.
This was a big problem. Now, obviously, all governments work to try and bring down inflation. The Conservatives did a pretty good job of doing that, and the Bank of England base rates started to come down.
They came down in 2024, and many people expected they were going to come down one final time in December 2024, but that didn't happen.
That's because we started to see an increase in inflation, and this is one of my concerns for buying property in 2025: what could happen to interest rates.
The reality is when we take out a mortgage on a property, if it stacks up now and we lock in that mortgage rate for three or five years, we've got stability.
But obviously, it depends on when you actually buy a property as to the rate you're going to get.
Now, at the moment, rates are okay, and properties kind of stack up. But the challenge is if we get more inflation—and I think we could get more inflation, particularly if you think about the Labour government awarding this increase to the minimum wage.
That sets a precedent. I think all of the civil servants and everyone who works for the government, which is millions and millions of people, are going to want inflation-busting pay rises.
If they're all getting paid more money, that's more money in the economy, more money being spent, and it's going to cause inflation.
So, I feel that we're going to have inflation probably rising in 2025, and I wouldn't be surprised if the Bank of England starts to increase their base rate to try and control that inflation.
For that reason, I would suggest if you're going to be buying property in 2025, the next few months are a really good time to go and find some great deals, secure those deals, and lock in really good interest rates before interest rates could go up by the end of 2025.
Now, of course, interest rates might come down. I might be completely wrong; inflation might come down, and interest rates might come down further.
I doubt we'll ever get back to the half a percent base rate we had for the last decade or so, but I think interest rates might come down to about the 3.5% to 4% mark as the base rate for the Bank of England.
This means it's going to be fairly affordable for us when we're buying investment properties.
But my point is you want to be doing this in the next few months—locking in a good rate before they could potentially go up.
The third point I want to suggest is a big mistake that people make when they go out and want to buy property: they try to do it on their own.
Now, that's dangerous for a couple of reasons. Any idiot can go and buy property, and unfortunately, many idiots do go and buy property.
I was one of those idiots when I bought my first property back in 1995. I didn't know what I was doing; I just wanted a home to live in.
I rented out two of the rooms to my friends who were still studying at university, and the rent they paid pretty much covered the mortgage and the bills.
That's what kind of got me going in property and realizing how powerful property investing could be. But I didn't know what I was doing, and I learned the hard way through trial and error.
The good news is you don't need to learn the hard way. You've got this YouTube channel and many other YouTube channels that give fantastic information.
You've got podcasts; there's no excuse for not knowing what to do. The problem is that when there's so much information out there, sometimes people get overwhelmed.
They don't know where to start and how to get going. So, I'm going to give you a really good solution: how you can get some help, some knowledge, and some support.
That is by attending one of our local Property Investor Network meetings. Now, there are meetings all over the UK and two in the Netherlands, so there's bound to be a meeting close to where you live.
If you're outside of the UK or Netherlands, we actually have a global virtual meeting if you want to listen in to that. You can participate and invest in the UK still.
What happens at these meetings? I must admit, when I first went to a network meeting, it was a business network meeting. I hated the idea of going into a room of complete strangers and having to make small talk and trying to get to people.
I just didn't want to do that. The difference with a Property Investor Network meeting, or PIN as we call it, is that everyone there has at least one thing in common: an interest in property.
The vast majority of people who go to PIN meetings are very new. They might have no properties or maybe one or two properties that they bought the hard way before they learned how to do it properly.
They want to educate themselves and get around like-minded people. You see, as you become more successful and get more properties, financially, there are fewer and fewer people around you—family, friends, work colleagues—who actually understand what you're doing and can support you.
So, you need people like you who have similar goals to encourage you, champion you, and push you forward. That's what you get at PIN.
We have some people who are very experienced at PIN, and they come along because they know the power of networking.
Everyone has a limited amount of resources—time, money, knowledge—but by working with other people, you can learn from those people, and you can help each other.
That's very much the spirit we encourage at our Property Investor Network meetings.
Now, they happen in the evening, so it's after work for most people. They're on a Tuesday, Wednesday, or Thursday, so a particular night of the week, and it's the same night—it might be the second Tuesday of the month every month in that particular location.
You go to our website, which is pinmeeting.co.uk. I'll put a link below this video: pinmeeting.co.uk.
There, you'll find a list of all the meetings around the country. Now, it costs £25 to come to a meeting. If you've been to a meeting before, you'll know that's a very small price compared to what you're going to learn, the boost in your motivation and energy you're going to get from it, and also the connections you can potentially make at that meeting.
However, if you've never been before, I would love to give you the opportunity to come along to a PIN meeting completely free of charge as our guest to try it for yourself and see what you've been missing out on.
In the description below this video, you're going to see a link, and there's also a code—a voucher code—which is the word "YouTube."
All you have to do is click on the link, find your local meeting, check you can do the date and the time, and then scroll down to the payment page.
Instead of paying the normal £25, click where it says "pay with a voucher code." Then, you can insert your details and put the voucher code "YouTube" in.
It will bypass the payment page, and we'll send you a confirmation email. Now, if you don't turn up, you've wasted your opportunity to go.
So many people who haven't liked the idea of networking and meeting strangers put it off and put it off, and when they finally go, they say, "Oh my God, I didn't know what it would be like! I wish I'd come here years ago!"
So, don't put it off. Now is always the best time to do it.
So why not, before you look at another video, click on the link below this video, come and check out your local PIN meeting? If you've been before, book in for your next meeting.
If you've never been before, use the voucher code "YouTube" and come along as our guest to try it yourself.
I absolutely guarantee you're going to love the experience. We've got a whole team of people there to look after you, especially if you're new.
They'll introduce you to some other people, and you've always got something to talk about, which is a common interest in property, no matter where you are in your property journey.
So, I know that's going to be useful.
To summarize this video, I've said don't buy properties in 2025 until you watch this video because you want to make sure you're using the right strategy.
I don't think single lets are the best thing to do if you're looking to buy a property. Recognize that I believe interest rates might go up if we get further inflation, which I think is a big chance.
So, don't leave it to the end of the year where you might be paying more for a mortgage. You want to get going right now, and the way to do that is to get some support, get some help, and get some education.
You can do that by coming to your local Property Investor Network meeting. If you've never been before, come as our guest.
I do hope you've enjoyed this video. Come and comment below with your thoughts about the property market in 2025.
Make sure you subscribe to this YouTube channel and hit the bell icon. Whenever we bring out a video, you'll get notified so you don't miss it.
Some of these videos are very timely with opportunities, how to invest right now, the best strategies, and if you watch it three or four months after it's come out, you're not going to get the full value.
So, it's a really good idea to subscribe and also hit the bell icon. Until the next video, I encourage you to invest with knowledge, invest with skill, and I hope you're going to have a wonderful time at the next PIN meeting.