Property prices in each nation have continued to increase year on year, according to the Land Registry. And, except for England, each nation is seeing annual property prices rise almost twice the rate they have since 2005, with Northern Ireland seeing rates almost three times higher.
There are several reasons why England;s property market is struggling to see ‘average’ annual rises though.
London is an unusual drag on property price rises, having seen premium prices drop back to 2014 levels, not recovered to prices achieved in 2022, while flats are the same price today as they were eight years ago.
Affordability is harder hit with interest rate rises due to the fact that the England average price is 26% higher than Wales, through to 35% higher than Scotland. This restricts demand and that impacts on the growth in property prices.
General indices commentary:
RICS
“A widening divergence is becoming evident across different parts of the UK. In particular, Northern Ireland and Scotland continue to see house prices move higher, while respondents in the North West and the North of England report prices on an upward trajectory.”
Rightmove
“Market activity is difficult to compare with this time last year, as the looming stamp duty deadline at the end of March in England was still affecting overall averages last year.
“Some hopeful movers at this time last year were continuing to try to beat the odds by securing a new home and completing the purchase before higher taxes took effect, particularly in the more expensive south of England.
“Current trends look stronger when compared with 2024. The number of newly listed properties for sale is just below this time last year (-1%) but 11% higher than two years ago. Similarly, the number of sales agreed is 5% below this time in 2025 but is 9% higher than at this time in 2024.”
Halifax
“Regional differences in house price performance have become more pronounced, with a clear divide between the northern and southern parts of the UK. In the north, positive momentum has carried over from last year, with demand and inflation remaining robust.
“Northern Ireland continues to lead the UK, with average prices rising +5.9% annually to £217,206. Scotland follows closely, recording annual growth of +5.4%, taking the average property price to £221,711. Elsewhere, Wales saw a modest rise of +0.5% over the year, with the average home now costing £228,415.”
Zoopla
“House price rises are higher than last year in northern England and Scotland.”
Regional property market performance
Overall, the latest indices suggest that a few more regions are either experiencing price falls or remaining flat than has been the case for some time. Nationwide is currently the only lender reporting year-on-year growth across all regions, but with the East and South East recording just 0.1% rises, that really means they too are only recording 7 regions rising versus the 9 reported.
This difference is likely due to the timing of the data, particularly in the period leading up to and immediately following the Budget, when we saw some caution among buyers entering the market.
However, looking across the indices there are some similar trends emerging which are in line with the reasons why the Scotland, Wales and Northern Ireland are performing better than England:
Stronger Property Market Relative Performance:
– More affordable regions
– Areas where average prices are below the national average
– Markets less exposed to high mortgage borrowing
Weaker or Flatter Performance:
– Higher-value southern regions
– Areas where affordability pressures are greatest
– Markets sensitive to interest rate expectations
Looking ahead, this pattern of regional property price ‘stagnation’ could persist, especially in the South, If higher stock levels continue throughout the year without a matching uplift in demand – and especially if interest rates do not reduce as anticipated – price growth in many areas may remain subdued for at least the first half of this year.
Commentary on the regional property prices:
Halifax
“Within England, the strongest growth remains concentrated in the north. The North West saw prices increase +2.1% to £244,328, while the North East recorded +1.2% annual growth, bringing the typical price to £181,198.
“In contrast, southern regions have seen prices soften. The South East, South West, London and Eastern England all saw annual declines of more than 1%.
“As the four most expensive areas of the country, these markets tend to be more sensitive to higher borrowing costs and taxes, which can weigh on affordability and confidence.”
“Regionally, more than half of homes for sale are cheaper to buy than rent in the North East and Scotland, followed by the North West. In contrast, higher house prices in London and the Midlands mean that fewer than 40% of homes are cheaper to buy than rent.
“These changes benefit all buyers using a mortgage, supporting higher house price growth across northern England and Scotland. The impact is more limited across southern regions where higher stamp duty costs are an increasingly costly financial hurdle for home buyers.
“Sellers in southern England who are planning to move this year will need to price realistically to secure a speedy sale. Be sure to factor this into the offer you make on your next purchase.”