A Tale of Two Halves: The UK Economy & Property Market in 2025

By Sim Sekhon.

Rachel Reeves’ latest economic announcements, titled ‘How the UK will Kick Start Growth’, aimed to reinforce Labour’s commitment to growth and stability. Yet, for landlords, agents, and property professionals, the key takeaway was that the government’s focus remains elsewhere employment challenges persist, taxation remains a concern, and the rental sector continues to carry the weight of a housing market in flux.

Having spoken to many corporate and larger agents across the UK in recent weeks, one thing is clear 2025 is a year of two halves. The first half is already shaping up to be driven by activity, pipeline movement, and businesses positioning themselves for regulatory and economic shifts. The second half? That will be about who adapts, who innovates, and who gets left behind.

 Sales: A Busy Q1 & Q2, But What Happens Next?

Property sales pipelines are reported to be strong, with completion rates accelerating ahead of the upcoming capital gains tax (CGT) changes in April. Sellers are pushing deals through before the deadline, maximising their tax positions. Beyond April, we know the average time from offer to completion is 85-115 days, so momentum should carry through the first half of the year.

The real challenge? Q3 and Q4. Interest rate fluctuations, affordability pressures, and government policies will dictate whether transaction volumes hold or slow down. Smart agents are already planning their next move, not just riding the wave.

 Lettings: The Power Base of Every Successful Agency

Foxtons’ latest financials reveal that two-thirds of their revenue now comes from lettings a clear sign of where the real, sustainable income is in agency. The message is loud and clear: lettings are not just a fallback when sales slow they’re the foundation of long-term success.

From my conversations with agencies, the key themes in 2025 are:

• Landlord retention on fully managed portfolios.
• Winning new business in a market where landlords are more selective.
• Automation and efficiency, as labour costs and compliance demand increase.

 Automation & AI: The Competitive Edge

Reeves’ economic announcements didn’t ease concerns on employment costs, meaning that automation is no longer optional—it’s essential. Every agency needs to be looking at AI, automation, and technology to streamline operations and stay ahead.

We’ve already seen major shifts—AI-driven platforms reshaping entire industries, DeepSeek knocking billions off stock valuations last week, and fraudulent tenant applications reaching unprecedented levels. Some agencies report that 20-40% of applications contain fraud, with one client experiencing fraud in one-third of applications.

If you’re not leveraging smart automation, predictive analytics, and AI-powered tools, you’re already behind. Use tech to handle the admin, free up your team, and focus on relationships.

Landlord Retention: Elevating the Standard

For too long, many agencies have relied on simply collecting a management fee rather than proactively working with landlords. That’s no longer enough.

Landlords need value. They need insights. They need someone who thinks like a business partner, not just an agent. The best agencies are:

• Maximising rental income with expert advice.
• Proactively reducing void periods through better tenant matching.
• Providing clarity on compliance and future-proofing portfolios.

The Renters’ Rights Bill (RRB) will change the game, and agencies need to be ahead of it. Tenant selection will become even more crucial, and the best agencies will be the ones that provide landlords with long-term, financially stable tenants. Fraud will continue rising—imagine when RRB is fully in play.

Are Agencies Incentivising the Right Behaviours?

Walking through the office, I still hear agents pushing to adjust decisions to close a deal—but is that always what’s best for the landlord? The best agencies are aligning incentives with long-term success, not short-term wins.

This year, landlords need the right agents more than ever. The agencies that refine their strategy, focus on landlord value, and fully embrace tech will compound their success over the coming years.

Final Thought: Build for the Long Term

2025 is not just another year—it’s a turning point. Smart agents will adapt, landlords will seek true value, and technology will redefine what’s possible.

Landlords need the right agency now more than ever. The question is: Will you be ready?