While the EU is betting on stabilization and “green” construction, the United Kingdom is demonstrating flexibility and continues to attract global investor interest. Financial expert Avi Itzkovich conducted a comparative analysis of the key trends for 2024–2025 to determine which of these markets may take the lead in the near future.
The real estate markets of Europe and the United Kingdom in 2024–2025 are experiencing a period of adaptation to macroeconomic challenges. After the sharp price surge in 2021–2022, driven by low interest rates and high demand, the market entered a correction phase in 2023. The main influencing factors have been the tighter monetary policies of central banks and the rising cost of mortgage lending, both of which have cooled demand.
Throughout 2024, the average price of housing in Western European countries declined by 5–8% compared to the peak levels of 2022, while in Eastern Europe the drop was less steep — around 2–4%. In the United Kingdom, the market also underwent a correction, though it was more uneven: London and the South East remain “islands of stability,” where prices fell by just 1–2%, whereas in smaller cities and the North, the decline reached up to 10%
“We are witnessing a shift from a seller’s market to a buyer’s market, particularly in the secondary housing segment. High mortgage rates are the main constraining factor, prompting developers to rethink their strategies,” notes Avi Itzkovich.
In 2025, the situation is gradually stabilizing. Both the European Central Bank and the Bank of England have indicated the possibility of moderately lowering key interest rates in the second half of the year, which could reinvigorate the market. Analysts expect housing prices in Europe to stabilize, while in the United Kingdom, a modest increase of around 1–2% is possible in the premium segment.
In 2024–2025, the European real estate market is developing unevenly. Germany, long regarded as a symbol of stability, is now facing stagnation. A shortage of new housing construction and rising material costs have led to a decline in new project deliveries. In Berlin, prices for resale apartments have dropped by 6–7% compared to 2022.
According to Avi Itzkovich, France remains attractive thanks to a strong rental sector, particularly in Paris and Lyon. In 2024, rental rates in these cities rose by 4–5%, offsetting the drop in sales prices. Spain and Portugal continue to draw steady interest from foreign buyers, especially in tourist regions. Poland shows a contrasting dynamic: in Warsaw and Krakow, prices have increased by 2–3% due to demand from Ukrainians and international investors, while smaller cities have seen the market cool.
“The European market is still quite fragmented. While some countries are struggling with declining demand, others are gaining momentum thanks to internal migration and outside investment. Overall, 2025 may become a year of gradual stabilization, but it’s too early to talk about rapid growth,” says Avi Itzkovich.
New regulations and environmental standards are playing an increasingly important role. The EU is actively promoting energy-efficient construction and the modernization of old housing stock, which is influencing developer strategies and project costs. While this creates additional expenses for builders, it also encourages innovation in the field of “green” construction.
The comparative analysis conducted by Avi Itzkovich reveals that the UK real estate market in 2024–2025 shows greater resilience in the premium segment, while the mass market continues to feel pressure from rising mortgage costs. London remains the main investment hub, particularly for foreign buyers from the Middle East and Asia.
According to Itzkovich, while EU countries are focusing on long-term stability and gradual adaptation, the UK market is demonstrating a more flexible response to crises. After the pandemic and the effects of Brexit, demand for housing in key UK regions has begun to recover. In 2024, the London market even showed a slight price increase (around 1%), while the broader European market continued to decline.
“Strategically speaking, the UK benefits from global investors and the prestige of its properties, while Europe gains its strength from stability and systemic support for its housing stock. In 2025, we are likely to see a levelling of the playing field, but in my view, London’s premium segment will remain out of reach for most European cities,” stresses Avi Itzkovich.
Amid this contrast, the main challenges for both markets remain high borrowing rates and regulatory pressures.
“If the Bank of England proceeds with an interest rate cut in autumn 2025, the UK could become the first market in the region to exit the stagnation phase and return to growth. Europe, meanwhile, is counting on a more gradual recovery — especially in Germany and France, where demand remains relatively subdued,” concludes Avi Itzkovich.
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Real Estate Market 2024–2025: Europe or the United Kingdom — Who Will Show Better Dynamics?