Property prices in each region continue to perform quite differently to each other – especially over the long term. According to both the Land Registry and Nationwide, average property prices in England are around twice as high as Wales, Scotland and N.Ireland, heavily influenced by high prices in the Capital and the South.
England and Wales’s year-on-year rises this month are pretty much in line with their long-term averages, while Scotland is seeing better-than-average growth year on year and over time.
Meanwhile, Northern Ireland is doing well year on year, but long-term growth still lags other countries. This is due to the fact that prices in NI rose dramatically in the 2000s and fell back more when the housing price bubble burst due to the credit crunch.
Northern Ireland housing market
“Northern Ireland continues to have the strongest annual property annual price growth in the UK, though at +5.9% in January this eased considerably compared to December (+7.3%). Properties in Northern Ireland now cost an average of £205,473.”
Scottish housing market
“Scotland once again saw a lower rise in house prices compared to the rest of the UK, with properties in the country now worth an average of £210,690, +2.4% more than the year before.”
E.surv – Quiet end to 2024 but still a positive outlook
“Scotland’s housing market has seen a gradual recovery in 2024. While house prices have reached record highs in some areas, overall growth has been modest. November saw a slight dip in average prices, down £1,400 (-0.6%) from October, leaving the average price at £223,000—up just 1% year-on- year.
“Only 11 local authorities recorded rising prices in November, with Angus achieving a new record average price of nearly £199,000. This marks the highest average house price ever recorded in the area. Overall, 19 authorities reported higher prices compared to a year ago, though growth has slowed recently.
“Sales activity remained strong, with an estimated 8,800 transactions in November, 10% higher than the previous year. With the Scottish Fiscal Commission forecasting price growth through 2028/29, the market is expected to strengthen in 2025, though tax policy changes and broader economic trends may influence activity.”
Welsh housing market
“House prices in Wales were up +3.6% compared to the previous year, with properties now costing an average of £227,397.”
“The geographic distribution of house price movements is clear, with improving trends in Wales.”
Across the English regions we are not only seeing property price growth but we are also seeing prices recover following the falls experienced throughout 2023.
However, we are also noticing that the ‘north/south’ divide has returned to the market. Unusually though, its the North leading the price growth while the South continues to lag behind. When the market has previously recovered, it’s usually been led by London and the South, so this is a very different trend one we have seen in the past.
Of the regional changes, the North East is leading the growth in the North. This is likely to be because it’s growth has lagged all other regions, so there is more room for property prices to rise. Each of the indices records prices rising by 5% or more – bar Zoopla, which is showing more subdued growth.
Yorkshire and Humber and the North West follow close behind, depending on which index you look at.
Meanwhile, the south is seeing property prices rise, but only slightly. London, previously the powerhouse of property price rises, is only seeing growth of 1-2% year on year.
I think there are three reasons for this:
1. The effective ‘cap’ placed on property price rises from mortgage restrictions on FTBs.
2. 50% of buyers purchasing a home in London are first-time buyers – much higher than the 30% proportion elsewhere.
3. Many of the properties sold are flats and these haven’t seen as high a price growth as houses.
In theory, even if the property market recovers further, although there may be more transactions, these factors should continue to slow property price growth versus other regions.
Overall though, the market continues to look pretty good for 2025 and the race will be on over the next few weeks to get as many transactions over the line to beat the SDLT rise in England, so I hope everything goes as smoothly as possible!
Commentary on regional performance by indices
“With unsold stock levels at a nine-year high and supply still rising, there is a notable amount of downward pressure on prices. However, regional differences are considerable and we expect home prices in the North, Scotland and Wales to continue to outperform London and the South. Market expectations are for a rate cut by the Bank of England in February and, should this materialise, buyer confidence may get the fillip it needs, at least in the short term. The North East remains the regional growth leader with the mix-adjusted average asking price now 5.1% higher than a year ago. Yorkshire is in second place at 4.6%.
The annualised mix-adjusted average asking price growth (sales) across England and Wales is now 1.9%; in January 2024, the annualised growth of home prices was -0.5%.”
“At the other end of the spectrum, the East of England shows a mere 0.4% growth over the last twelve months. The South East is only slightly better at 1.2%. UK asking rent growth remains sub-inflation at 1.5% overall. However, the national average is dragged down by Greater London at -1.9% while the best performers, East Midlands and Yorkshire, indicate 12.7% and 11.5% growth year-on-year respectively. The annualised mix-adjusted average asking price growth (sales) across England and Wales is now 1.9%; in January 2024, the annualised growth of home prices was -0.5%.”
“Southern regions of England are recording the lowest rates of house price inflation, below 1.5%. The recent boost to FTB demand is more concentrated in London and South East England and we expect this to support near-term price inflation in these regions.
“There are signs that the recent upturn in prices is starting to level out as mortgage rates drift higher and buyers have plenty of homes to choose from. This will keep price inflation in check over 2025, but the current north-south divide in house price inflation is expected to continue over the year ahead.”
“In England, the North East has overtaken the North West as the region with the strongest annual property price growth, up +5.2% compared to the previous year, with properties now costing an average £178,696. This is the first time since September 2023 that the North West has not topped the table of English regions for annual growth. London retains the highest average house price in the UK, at £548,288, up +2.8% compared to last year.”
