House prices in the UK rose dramatically during the coronavirus pandemic, with growth slowing down in 2022 and turning negative in 2023. The year-on-year annual house price change peaked at 14 percent in July 2022. In April 2025, house prices increased by 3.5 percent. As of late 2024, the average house price was close to 290,000 British pounds. Correction in housing prices: a European phenomenon The trend of a growing residential real estate market was not exclusive to the UK during the pandemic. Likewise, many European countries experienced falling prices in 2023. When comparing residential property RHPI (price index in real terms, e.g. corrected for inflation), countries such as Germany, France, Italy, and Spain also saw prices decline. Sweden, one of the countries with the fastest growing residential markets, saw one of the largest declines in prices. How has demand for UK housing changed since the outbreak of the coronavirus? The easing of the lockdown was followed by a dramatic increase in home sales. In November 2020, the number of mortgage approvals reached an all-time high of over 107,000. One of the reasons for the housing boom were the low mortgage rates, allowing home buyers to take out a loan with an interest rate as low as 2.5 percent. That changed as the Bank of England started to raise the base lending rate, resulting in higher borrowing costs and a decline in homebuyer sentiment.

In the presented European countries, the homeownership rate extended from 42.6 percent in Switzerland to as much as 95.9 percent in Albania. Countries with more mature rental markets, such as France, Germany, the UK, and Switzerland, tended to have a lower homeownership rate compared to the frontier countries, such as Lithuania or Slovakia. The share of house owners among the population of all 20 euro area countries stood at 64.5 percent in 2024. Average cost of housing Countries with lower homeownership rates tend to have higher house prices. In 2024, the average transaction price for a house was notably higher in Western and Northern Europe than in Eastern and Southern Europe. In Austria, one of the most expensive European countries to buy a new dwelling in, the average price was three times higher than in Greece. Looking at house price growth, however, the most expensive markets recorded slower house price growth compared to the mid-priced markets. Housing supply With population numbers rising across Europe, the need for affordable housing continues. In 2024, European countries completed between one and six housing units per 1,000 citizens, with Ireland, Poland, and Denmark responsible for heading the ranking. One of the major challenges for supplying the market with more affordable homes is the rising construction costs. In 2021 and 2022, housing construction costs escalated dramatically due to soaring inflation, which has had a significant effect on new supply.

The prime rent for large warehouses over 100,000 square feet in the UK was 11.82 British pounds per square foot in the first quarter of 2025. However, in London, the South East, and East, rents were twice higher, with London reaching 29 British pounds per square foot and the South East & East at 23.5 British pounds. Conversely, the North East was the region with the most affordable warehouse rent, with the prime rent per square foot amounting to 7.75 British pounds. What is the rental price for warehouses in Europe? The UK has some of the most expensive warehouse rents in Europe. Other key markets that fetched high prices were Oslo, Helsinki, Dublin, and Munich, with rents ranging between 100 and 200 euros per square meter. In Eastern Europe, prices were notably lower, with markets such as Katowice, Warsaw, and Bucharest, reporting rents below 60 euros per square meter. How are warehouse rents expected to develop in the next years? The industrial and logistics real estate sector has grown dramatically since the COVID-19 pandemic. Although growth is forecast to slow, rents in the sector are expected to continue to increase until 2025. Industrial real estate is anticipated to outperform offices and retail not only by rental growth but also in terms of capital value increase.

East Dunbartonshire, the city of Edinburgh, East Loathian and East Renfrewshire were the most xpensive regions for residential property in Scotland as of February 2025. The average house price in those regions were over 300,000 British pounds. In comparison, the average house price in Scotland was almost two times lower. Which are the most expensive streets to live in Scotland? With the average house price valued at approximately 3 million British pounds, Queen's Crescent, Auchterarder PH3 was the most expensive street for residential real estate in Scotland in 2024. This was almost twice higher than in the second-priciest street, Ann street, Edinburgh EH4. Compared to other regions in the UK, Scotland is affordable Though 3.6 million British pounds is an impressive figure, not all housing in Scotland falls in this price bracket. In fact, with an average house price of about 170,000 British pounds, Scotland is the third most affordable region for first-time home buyers. Furthermore, it has the second lowest rent to income ratio in the UK.