REGIONAL HOUSE PRICES: Long-term trends have resumed

Property market expert, Kate Faulkner, reveals that regional and country changes in house prices are mostly on par with inflation.

UK map overlay residential propertiesCountry wise – bar Northern Ireland which still has a way to go to catch up with house prices seen at the height of the market prior to the credit crunch – the Land Registry and Nationwide are showing that long term trends have resumed, with price growth averaging around its long term performance – on a par with inflation.

property prices by country January Table

Local expertise for each country is essential when looking at how the property market is performing. This is especially the case in the likes of Scotland and Wales where areas are as diverse as the English Regions.

Welsh housing market

Halifax

“House prices in Wales were up +4.6% compared to the previous year, with properties now costing an average of £226,646.”

Nationwide

“Wales saw a 2.7% year-on-year rise.”

Northern Ireland housing market

Halifax

“Northern Ireland maintains the strongest property price growth of any nation or region in the UK, rising by +7.4% on an annual basis in December. Properties in Northern Ireland now cost an average of £205,895.”

Nationwide

“Northern Ireland was the best performing area for the second year running, with prices up 7.1% over the year.”

Scottish housing market

Halifax

“Scotland saw a lower rise in house prices compared to the rest of the UK, with properties in the country now £209,959, +2.4% more than the year before.”

Nationwide

“Scotland recorded a 4.4% increase in 2024.”

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.”

Regional house prices tracking

regional property price picture January Table

Regionally, things have really picked up with most regions now out of the doldrums. The only one still ‘lagging behind’ in growth is reported by Rightmove, and perhaps surprisingly this is London, usually the power house of property prices.

However, here affordability limits continue to bite and show that the previous government’s efforts to protect buyers from affordability issues caused by market fluctuations has actually worked. What these changes have done is to introduce caps on property price growth for the first time since 2000 when buyers were limited to borrowing 3.5x their income.

house prices up and down by region January TableThat’s why it will be interesting to see what happens if the government – as recently reported – decides to relax some of these restrictions for First Time Buyers.

Although some have expressed nervousness of dropping the current rules, I do think there is some room to manoeuvre. However, I would be more keen to increase support for First Homes in lieu of Help to Buy, which was actually a very successful scheme, just probably not restricted as much as it should have been and also it didn’t have the advantage of offering affordable home ownership for the long term.

Commentary on the regional performance by indices

Home.co.uk        

“The North East holds its top position in regional property market growth, albeit with the year-on-year gain decreasing to 5.8%. In second place is Yorkshire at 4.4%.

“The East of England is the worst performing region, indicating no change (0.0%) over the last twelve months.”

Zoopla  

“The South East (0.7%), Eastern (0.8%) and South West (0.9%) regions are recording the lowest levels of price inflation. House prices are rising fastest and rebounding off a low base in Northern Ireland (6.5%). The next highest growth rates are in the North West region (3.5%), followed by the North East (2.8%), Scotland and Wales (2.6%).”

North-South divide to remain over 2025.”

“We expect UK house prices to increase by 2.5% over 2025, with an ongoing North-South divide resulting in lower price inflation across southern England4 and faster elsewhere. This is down to the relative affordability of housing across the country and how much house prices have risen relative to household incomes.

“House prices started to recover from 2010 onwards after the downturn of 2008/09. House prices in London have risen by 83% since 2010, followed by 70% across southern regions of England, 66% across the Midlands and 56% in Wales.

“At the other end of the spectrum, some area have recorded more modest price increases compared to 2010. Average house prices are just 19% higher in Northern Ireland, 30% higher in Scotland and 41% higher in northern regions of England.

“Household incomes have grown by 58% since 2010, meaning there is headroom for house prices to rise in regions where prices have lagged behind income growth and less room for growth in higher-value markets. This is already being reflected in the profile of house price inflation across the UK, and we expect it to continue over 2025.”

House price inflation from 2010 chart

Nationwide

“Across England overall, prices were up 3.1%, compared with Q4 2024. There was a clear north-south divide in house price performance in 2024 as Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) continued to outperform southern England, with prices up 4.9% year on year. The North was the best performing English region, with prices up 5.9% year on year.

“Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 2.2% year-on-year rise. The South West was the best performing southern region with annual price growth of 2.7%. East Anglia was the weakest performing UK region in 2024, with a modest 0.5% annual increase.”

Halifax

“In England, house prices in the North West were up +5.3% compared to the previous year, with properties now costing an average £238,832 – the strongest growth of any English region.

“London retains the highest average house price in the UK, at £547,614, up +3.3% compared to last year.”


What's your opinion?

Back to top button