UK, US House Prices Rise Amid Regional Market Divergence

In the UK, house prices have continued their upward trend in 2025, with an overall 3.7% annual increase to an average of £269,000, driven by strong growth in regions like Scotland and Northern Ireland, while London experienced minimal price rises. Contrastingly, the U.S. housing market shows signs of stagnation despite an increase in ground-breaking construction; builder confidence remains low due to high mortgage rates, causing a cautious and subdued market environment. Milwaukee is highlighted as the hottest U.S. housing market, with significant sales and price increases, reflecting a broader surge in Rust Belt cities. In the financial markets, the real estate sector leads the S&P 500's performance, aided by declining Treasury yields which help lower mortgage rates and boost homebuying demand. Investor sentiment in real estate is cautiously optimistic, with capital increasingly poised for deployment amid signs of market stabilization, especially in multifamily, office, and industrial sectors, despite ongoing geopolitical and economic uncertainties. Overall, while challenges persist, both UK and U.S. real estate markets show pockets of strength and potential for growth in 2025.