- UK house prices continue rising year-on-year, led by Northern Ireland and Scotland.
- England’s growth remains slower as London drags down national averages.
- High borrowing costs and affordability pressures weigh on southern housing markets.
UK house prices are still climbing year-on-year, but the momentum is clearly stronger outside England, according to the latest Land Registry data.
Property prices across the UK nations have continued to rise, though England is lagging behind Scotland, Wales and Northern Ireland. Analysts tracking the UK housing market suggest the divide is becoming more pronounced, with price growth in most nations running at nearly double their long-term averages since 2005.
Northern Ireland appears to be leading the charge. Price growth there is almost three times higher than its historical average, highlighting a strong rebound in demand for relatively affordable housing.
England, by contrast, seems to be moving more slowly. Much of that slowdown appears tied to London, where premium property prices have slipped back to levels last seen in 2014 and remain below their 2022 peaks. Prices for flats in the capital are also roughly where they were eight years ago, suggesting the market has yet to fully recover.
Affordability is playing a major role in this slowdown. Average house prices in England are about 26 per cent higher than in Wales and 35 per cent above Scotland. Combined with elevated mortgage rates, the gap appears to be limiting demand and keeping price growth in check.
Northern regions gain ground
Data from several housing indices paints a picture of a market increasingly divided along regional lines.
Halifax figures show Northern Ireland recording the strongest annual increase, with prices rising 5.9 per cent to £217,206. Scotland follows closely with 5.4 per cent growth, bringing the average home price there to £221,711. Wales saw a smaller increase of 0.5 per cent, pushing average prices to £228,415.
Within England itself, northern regions seem to be performing better. The North West recorded a 2.1 per cent rise, with average prices reaching £244,328, while the North East saw 1.2 per cent growth to £181,198.
Meanwhile, several southern regions are slipping backwards. The South East, South West, London and Eastern England all reported annual declines of more than 1 per cent.
Halifax reportedly said that the most expensive parts of the country tend to react more sharply to higher borrowing costs and tax pressures. These factors can quickly affect buyer confidence and affordability in markets where property values are already high.
Buyers rethink the rent-versus-buy equation
Activity in the housing market also reflects these regional differences.
Rightmove data suggests the number of newly listed properties for sale is around 1 per cent lower than a year earlier, though it remains 11 per cent higher compared with two years ago. Sales agreed are reportedly about 5 per cent lower than at the same point in 2025 but roughly 9 per cent higher than in 2024.
Another interesting shift is emerging in the rent-versus-buy calculation. According to Zoopla analysis, more than half of homes listed for sale in the North East and Scotland are now cheaper to buy than rent. The North West shows a similar trend.
The picture changes dramatically further south. In London and parts of the Midlands, fewer than 40 per cent of homes are cheaper to buy than rent, largely due to higher property prices.
Industry observers suggest affordability remains the key factor shaping the UK housing market. Regions with lower house prices and less reliance on large mortgages appear to be holding up better.
Southern markets, however, continue to face headwinds. Higher stamp duty costs and elevated borrowing rates are making property purchases more difficult for many buyers.
Some analysts believe this regional imbalance could persist for much of the year, particularly if housing supply continues to grow without a corresponding rise in demand. If interest rates fail to fall as expected, price growth in several areas may remain subdued through at least the first half of the year.
