OMF Newsletter - Summer 2025 Summary
- OMF Marketing department
- Oct 8
- 5 min read
Updated: Oct 9
It has been a busy summer in the property market, both in the UK and Europe. Here’s our summary of the key points, policies, movers, and shakers from the summer period.
At a glance
Euribor (12 months): 2.22% — We’ve seen a slight increase in the Euribor rate since May 2025.
Bank of England Base Rate – 4% - 0.25% reduction since May 2025
UK fixed rates: 3.72% - upwards( +%) — Rates have fallen ever so slightly, but we are still seeing lower fixed rate products in Europe.
Top movers: Spain & Portugal have seen strong property price growth; France has friendlier, longer-term fixed products, but a decline in lending options; Italy offers expat tax-friendly options
United Kingdom
The UK property market has experienced a decline in prices, although London—often referred to as the "property bubble"—has felt the least impact. On average, interest rates for loans have fallen by 0.2% to 0.3% since May. However, borrowing costs continue to be a challenge for buyers, along with the absence of financial incentives for first-time purchasers.
Best product snapshot
2‑yr fixed @ 3.90% (up to 70% Loan to Value) | 5‑yr fixed @ 3.92% (up to 70% Loan to Value)
Latest property news: August prices dipped marginally, but we have also seen some lenders increasing debt‑to‑income caps for select borrowers.
Quick tip: It’s wise to secure a product early for added security. Keep in mind that rates can change daily. However, if rates decrease after you secure a product (but before completion), we can always adjust your product choice to reflect the most competitive rate offered by your chosen lender at that time
Spain
Spain remains the crowd‑pleaser, with lower rates on offer and in-demand coastal markets, meaning appetite remains strong.
Best product snapshot
Fixed for 10 years @ 2.00% reverting to 12-month Euribor + 1.50% star product
Fixed for 25 years @ 2.75%
Maximum Loan to Value – 70%
Max Term - 25 years
Latest property news
Property prices have increased between 7.5–12% year on year, depending on the region. We have seen Valencia & the Balearics leading this surge.
A draft law has been presented to the Spanish government proposing a 100% tax on property purchases by non-EU, non-resident buyers (on second-hand property only) via a “Complementary State Tax on Real Estate Transfers” — effectively doubling tax/transfer costs, if passed.
Quick tip
Consider new‑build properties that offer ‘green/eco’ incentives. Lenders often offer reductions in product rates if the property meets the criteria.
Portugal
Portugal is fast becoming a market leader for international buyers. With lenders offering competitively priced products and a range of them, as well! We have seen a number of clients originally seeking properties in other countries turn their attention to Portugal.
Best product snapshot
Fixed for 5 years @ 2.80%, reverting to 6-month Euribor + 0.7%
Maximum Loan to Value – 70%
Latest property news
Among the EU’s highest annual price growth, demand remains strong despite a more restricted supply.
Does it affect international buyers?
Financing available to non‑residents; Portugal represents an almost ‘UK-like’ approach to applications and runs a smooth and efficient process.
Quick tip
Portuguese lenders really like to see well-presented applications. Applicants can sometimes have one chance to be presented in the best light. OMF understands lenders' requirements and what they are looking for in presentations; direct applications are not always the best route to take!
France
France is still seeing expensive rates and new laws on short-term lets, which will affect the international property investor market.
Best product snapshot
Fixed (up to 30 years) @ 3.85%.
Maximum Loan to Value – 85%
Max Term - 25 years
Latest property news
Rates have eased from the highs of 2024, but economic instability and the recent announcement of the downgrade of France’s Credit rating will likely have a knock-on effect on product rates, as lenders struggle to borrow money on more flexible terms.
If considering investment properties, short‑let rules are being tightened, especially in Paris.
Check the properties' Diagnostic de Performance Énergétique (DPE) rating (UK equivalent of an EPC rating). Restrictions are set on property rentals that hold specific ratings, which are considered inefficient.
Does it affect international buyers?
IFI (impôt sur la fortune immobilière) wealth tax applies if French real‑estate net assets exceed €1.3m. If you are considered a French tax resident, your global real estate holdings are included in the IFI calculation, although if you are a non-resident, only your French real estate assets are considered.
Quick tip
If seasonal letting matters to your affordability, confirm commune permissions pre‑exchange.
Italy
Italy remains steady and is becoming a magnet for expats using the €200,000 ‘Flat Tax Regime’, keeping available housing stock tight (see Latest property news for more information).
Best product snapshot
Fixed rate @ 3.5%–4.0% depending on term/loan to value.
Standard Loan-to-Values for Non-Residents start from 50%
Latest property news
The €200k flat‑tax regime (up to 15 years) continues to attract relocators.
€200k flat-tax regime is an Italian tax incentive aimed at attracting foreign High-Net-Worth individuals (HNWIs), by offering a fixed annual tax on foreign-sourced income for up to 15 years. Instead of being bound to Italy's standard tax rates (which can reach up to 43%), eligible individuals can pay a lump sum of €200,000 on all income generated outside Italy.
Does it affect international buyers?
Access can be limited, and the length of time from ‘application to offer’ can be somewhat slow.
Quick tip
Add a flood‑risk screen to your survey brief in river/coastal areas.
Summary
Eurozone mortgage products remain appealing, with the Euribor steady at around 2.22%. Spain and Portugal continue to stand out, offering some of the most competitive options in their respective markets.
In Portugal, lenders are efficient, responsive and open to lending to international buyers, particularly when applications are well presented.
Meanwhile, the UK property market is more cautious. Inflationary pressures and broader economic challenges are still weighing on affordability. Here, timing is crucial: securing a rate early can make a real difference. For most buyers, shorter two-year fixed products currently provide the most flexibility and best balance of cost versus risk.
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At OMF, we pride ourselves on our expertise in facilitating seamless UK & International property transactions. Our tailored mortgage solutions, in-depth market insights, and dedicated advisory services ensure that buyers navigate the property landscape with confidence, knowledge and security.
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