UK Housing Market Sees Divergence: London Prices Plummet While Northern Areas Surge
Analysis reveals a significant drop in London property values, contrasting with substantial gains in northern England and other parts of the UK.
The UK housing market is experiencing a notable divergence, with property prices in London seeing a significant decline while several areas in northern England and other regions have recorded substantial increases. Overall, UK house prices have risen by 1.4 percent, an average of £3,768, bringing the average property value to £273,000. However, this national average masks considerable regional disparities.
London has been the hardest-hit area, with property values falling by an average of £18,758 over the past year, a decrease of 3.3 percent. Only 12 of the city's 32 boroughs saw positive price movements, with Greater London generally outperforming central London.
The City of Westminster has seen the most significant drop, with property values plummeting by 20.7 percent. Homes in Kensington and Chelsea also experienced a substantial decline, losing an average of £202,092 in value. The City of London followed, with properties shedding an average of £149,900.
In contrast, northern England has witnessed a property price boom. Trafford, in Greater Manchester, led the gains, with the average home value increasing by £35,164 to £400,688. The Yorkshire and the Humber region also performed strongly, with Kirklees showing an average year-on-year gain of £11,994.
Other areas benefiting from rising property values include Market Harborough in the East Midlands, where average property prices increased by £27,108 to £347,010. The Derbyshire Dales saw a 7.1 percent rise, or £23,711, over 12 months. Some London boroughs, such as Kingston upon Thames and Barking and Dagenham, also reported price increases.
Homeowners in Scotland and Wales also saw positive returns, with annual price rises of 2.3 percent and 2.6 percent, respectively. However, overall house sales across England have seen a significant slump, down by 11,766 transactions in May this year compared to May 2025.
Despite the challenging economic backdrop, experts suggest the market shows resilience. Steady wage growth and employment figures better than expected are seen as factors supporting potential movers. With prices remaining substantially higher than pre-2020 levels, many homeowners are still in a relatively strong financial position.