UK Housing Market Sees Broad Growth, Except in London

The UK's housing market experienced a general increase in property values in May, with the average house cost rising by 2.7 percent, according to the Office for National Statistics. This marks an increase of £7,217, bringing the typical property value to £271,000. This follows a sharper rise of 3.8 percent in April.

England saw an average price increase of 2.3 percent to £292,095, while Scotland's average rose by 4.4 percent to £195,543, and Wales experienced a 4.2 percent increase to approximately £215,212. Northern Ireland recorded a substantial annual increase of 7.5 percent, with the average house price reaching £198,015.

Regional Performance

Homeowners in England's North East and North West regions saw the most significant price growth. Properties in the North East increased by 5.9 percent to £163,933, and in the North West, they rose by 5.8 percent to £219,506. Areas just outside London also showed strong growth, with Epping Forest experiencing an average home value increase of £29,086 to £535,682. Welwyn Hatfield in Hertfordshire saw prices rise by £26,617 to £453,552, and Surrey Heath recorded an increase of £25,774 to £457,454.

In Scotland, East Dunbartonshire was the top-performing area, with property values increasing by £25,428 to an average of £274,687. In Wales, Caerphilly homeowners saw the greatest rise, with an increase of £16,790 to £198,809.

London Market Decline

London stood out as an exception to the national trend, with property values dropping by 3.7 percent, or £20,000, to £544,814. Only 12 of the capital's 32 boroughs reported price increases. Westminster properties were the hardest hit, experiencing an annual loss of £247,188 to £836,331. Prices in The City also saw a significant drop of £244,895 over the year, resulting in an average property price of £636,980. Kensington and Chelsea recorded a fall of £150,161, bringing house prices to £1.2 million.

Waltham Forest was the best-performing London borough, with prices up £15,552 to £524,337, followed by Haringey, Havering, and Redbridge. The Orkneys in Scotland experienced the greatest drop in value, losing £5,892 to reach £214,237, and Monmouthshire in Wales saw properties drop by £5,514 to £325,582.

These figures follow April's inflation rate of 3.9 percent, the highest since March 2025, which preceded stamp duty changes implemented on April 1 of that year. Between April and May, average UK prices increased by 0.3 percent, a notable slowdown compared to the 1.5 percent increase recorded in the same period a year ago. Mortgage approvals in May also decreased, falling below the six-month average, according to the Bank of England.