House prices update – analysed by country and region: England, Scotland, N. Ireland and Wales
Kate Faulkner's latest review of house prices in across the UK and the regions, from analysis of index data published in March.
As the regional data below shows, prices may be down by 2 to 3% for England, but with significant regional variations from a 5.2% decline in the East (Nationwide) to a 4.4% rise in the North West (Halifax). This clearly demonstrates that house price fluctuations by country do not help buyers, sellers and home owners understand what’s really going on in regional markets.
A tale of two halves
Regionally, there is a real mix of rises and falls in this month’s data, ranging from 5.2% falls in the East according to Nationwide, through to rises of 4.4% in the North West.
When looking at how many regions are up or down by indices, the reports throw up some interesting stats. Rightmove, Home.co.uk (both asking price indices) and Zoopla, measured slightly later in the process, are all in agreement that around half the regions are seeing rises and the other half some falls.
Meanwhile, the mortgage indices are really interesting because you’d expect Nationwide and Halifax to agree with each other as they measure the market at mortgage offer stage. However, Nationwide’s measurement is quarterly, and Halifax’s is yearly, which may explain the completely different picture they are both portraying.
Finally, the Land Registry is typically ‘behind’ other indices trend wise as it measures the market post-completion.
So the regional date suggests that the market is improving currently and if it continues to do so, we should see more regions recording price rises as opposed to falls.
Commentary on the regional performance by indices
“Slowing price falls is a trend being recorded across all regions and countries of the UK. Five southern English regions are registering annual price falls of up to -2.1%, led by the East of England. House price inflation has moved into positive territory in the remaining four regions of England in addition to Wales, Scotland and Northern Ireland, where annual price inflation is 4.3%.”
Rising mortgage rates and reduced household buying power have hit higher-priced markets harder.”
“Higher mortgage rates and cost of living pressures have driven a rapid slowdown in the rate of house price inflation over the last 18 months. There are some notable variations in price inflation across the country which are primarily explained by the relative affordability of housing.
“Current housing trends fall into one of three groups.
- Southern England regions – covering East of England, South East and South West regions, these areas have registered the largest annual price falls. Rising mortgage rates and reduced household buying power have hit higher-priced markets harder than more affordable markets. Average home prices are £344,000 in these areas, 30% above the UK average. The pace of price falls is starting to moderate in Southern England , but it’s lagging in other areas of the UK.
- London – we see London differently to the rest of southern England. While it is the most expensive housing market, with an average price of £534,000. almost 2x the UK average. However, weak house price inflation over the last seven years has improved affordability and opening the market up to more potential buyers than before. The rebound in demand and low growth in the supply of homes for sale (just 7% in London vs 21% for the UK) explains why house price inflation is rebounding quicker than the southern England regions.
- Rest of the UK – while house price growth has slowed rapidly over the last 12 months, annual price falls have been very limited across the rest of the UK where average house prices are 28% below the UK level. This explains why the impact on buying power from higher mortgage rates outside Southern England has been less pronounced.
Our index shows Scottish house prices remaining in positive territory over the whole of the last year. Northern regions of England, the West Midlands and Wales are registering firmer pricing in response to rising sales agreed and better levels of housing affordability.”
“Looking at regional price growth over the last five years, it is clearly apparent that the northern English regions, Wales and Scotland benefitted most from the COVID boom, while London and surrounds fared worst. Moreover, these top regional performers continue to post the highest annualised growth rates. The current leader is the North West, over both 5-year and 1-year timescales. This stunning performance continues with the region adding 0.5% to the average asking price since last month.
“The underperformance of London, the East of England and the South East over the last five years is quite remarkable. However, such trends rarely continue for long in the property market and what is apparent is that there is plenty of room for price growth in the capital region.
“Looking at regional price performance over the last 12 months, it is the East Midlands that is the current laggard, having lost 2.1% since Feb 2023.”
“The North West saw positive growth of +4.4% on an annual basis to £232,128. The North East (+4.2%) also recorded strong increases over the last year. London continues to have the highest average house price across all of the regions, at £536,996. Prices in the capital have increased +1.5% and is the first positive annual growth seen since January 2023.
“Properties in Eastern England fell the most last month, when compared to the rest of the UK’s nations and regions, with homes selling for an average of £329,927 (-0.8%), a drop of £2,794 since the same time in 2023.”
“The region with the lowest fall in prices in both December (restated at -0.8%) and January was the North East, at -0.9%. In the North East, just two of its eight constituent areas are showing a positive movement in their annual prices, these being Tyne and Wear (+0.3%) and Northumberland (+0.3%), although between them they account for some 53% of house sales in the region.
“Second place is taken by the North West, at -1.3%. In this region, only two of its eleven constituent areas are showing a positive movement in their annual prices – Cheshire East (+1.6%) and the recently established Unitary Authority of Cumberland (+1.1%), which between them account for 11% of the region’s house sales. At third place is Yorkshire and the Humber, at -2.3%.”
For Scotland, Wales, and Northern Ireland we monitor:
- Halifax
- Zoopla
- surv
Summary from the indices of the Scottish housing market
“The average house price in Scotland in December 2023 has fallen by a minimal £93, or 0.0%, over the last twelve months, which is 0.2% lower than the revised rate seen in November, one month earlier. This is the lowest annual growth rate since May 2016, some seven and a half years earlier.
“16 of the 32 local authorities in Scotland were reporting a positive movement in prices over the previous twelve months, compared with 14 in November, perhaps presaging a potential upturn in house prices at the start of 2024.
“In December, East Renfrewshire had the highest annual rate of price growth of all local authority areas on the mainland, at 9.1%. Staying on the mainland, Midlothian has the second-highest annual growth rate at 8.2%.
“At the other end of the scale, the area on the mainland with the largest percentage fall in prices over the last twelve months, for the second month running, was Dumfries and Galloway, at -8.4%.”
“Our index shows Scottish house prices remaining in positive territory over the whole of the last year.”
Summary from the indices of the Welsh housing market
“Wales (+4.1%) also recorded strong increases over the last year.”
Summary from the indices of the Northern Ireland housing market
“Northern Ireland is the strongest performing nation or region in the UK – house prices here increased by +5% on an annual basis. Properties in Northern Ireland now cost an average £195,956, which is £9,359 more than the same time in February 2023.”
