UK House Prices 2025: A Tale of Two Markets
After many years of stagnation the UK housing market is looking a bit more lively and interesting....
Median house prices have risen by 1.6% over the past 12 months to £268,250, but medians aren't the real story... there are some regions where prices are pretty much crashing, but others where they are increasing.
The 'Levelling-Up' Effect in the North...
Property prices are increasing fastest in Northern England, notably in smaller cities and towns that have got good job opportunities (I mean this isn't rocket science to figure out the link!).
A recent report by MoneyWeek revealed that Blackburn (+5.8%), Wigan (+4.4%) and Birkenhead (+4.1%) are some of the country's fastest-developing regions. While these aren't classic property hotspots, they are benefitting from spillover from Manchester and Leeds where properties are limited but populations are booming.
Another possible driver is the post-pandemic mood for a better quality of life.... move from the South East to the North, take £100K of yer mortgage, work part-time, makes sense to me!
The Fall of Prime London and the South more Generally...
I can't say I'm sorry to say that the most prime spots in London have seen a radical drop in property prices... Kensington and Chelsea have seen a 15.1% year on year drop, with the average house now costing £1.19 million—the lowest since 2013.
I mean don't get me wrong, that's still a lot for a house but it's MUCH LESS than in previous recent years!
This trend seems to be the case in Southern England more generally, where there is something of a glut of properties coming onto the market and buyers are able to gain more control, forcing sellers to accept offers well below asking prices (although these are ridiculous in Southern England anyway!).
However, on average sellers are now still only accepting 3% lower than asking price, which is hardly them being in panic-mode.
Why the southern slump?
Seems to be a basic policy-hit for London..... Savills and Knight Frank report that London's high-end residential market has been declining since 2014, when stamp duty reforms dramatically increased cost of purchase. And then there's the general decline of Britain globally and Labour's apparent dislike of ultra high net worth individuals.
Good riddance, I say.
Final thoughts...
It would seem the UK property market is getting a little more balanced, and it seems this has something to do with ultra rich toddling off to other places.
Hopefully these declining prices in the south will give ordinary working people a chance to get their feet on the property ladder!
And hopefully not too many people will be priced out of the nice bits of the north!
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The increase in average house prices by 1.6% to £268,250 is definitely significant, but as you mentioned, it’s the differences between regions that really stand out.
I don't pay too much attention to the market apart from sometimes looking up local houses that I see are for sale. Ours must have gained value, but so has everywhere else. People move to our area as it's cheaper than London, but still a reasonable commute.