Despite lower mortgage rates and a recovery in lending volumes during the past year, affordability for homeowners is projected to remain challenging as 2025-2029 house prices are forecast to increase by 3.5 percent in both the Eurozone and the United Kingdom, according to AEW in the European research report European residential returns to focus on current income and rental growth.
New supply of housing remains limited and continues to fall short of most government targets. In addition, the private-rented stock is decreasing as a result of regulations making buy-to-let investments less attractive in the United Kingdom, the Netherlands and France.
European prime residential market rents are projected to see 3.2 percent growth in 2025-2029, ahead of inflation, despite most governments having tightened rental regulations in recent years.
Despite a 25 percent increase from 2023, residential investment activity remained weak in 2024, with European volumes tot
