UK Property Market Sees Regional Divide: North Booms While London Prices Fall

House prices across the United Kingdom have seen a modest increase of 1.4 percent, adding approximately £3,768 to the average property value, which now stands at £273,000. However, this national trend masks a significant regional divergence, with London experiencing a marked decline in property values while areas in northern England report substantial gains.

London has been the hardest-hit market, with an average of £18,758 wiped off house prices over the past year, a drop of 3.3 percent. Out of the city's 32 boroughs, only 12 recorded positive price movements. The most significant losses were concentrated in central London, with Westminster seeing values plummet by 20.7 percent, reducing the average home price to £876,788. Kensington and Chelsea also experienced substantial decreases, with an average loss of £202,092, though the benchmark cost for a home in this borough remains £1,232,640. The City of London followed, with properties losing an average of £149,900, bringing the mean price to £710,652.

In stark contrast, northern England has witnessed a property price boom. Trafford, an area within Greater Manchester, emerged as one of the UK's top-performing regions, with the average home value increasing by £35,164 to reach £400,688. Yorkshire and the Humber also showed strong performance, with Kirklees recording an average year-on-year gain of £11,994.

Other areas experiencing notable price increases include Market Harborough in the East Midlands, where average properties gained £27,108 over 12 months to sit at £347,010. In the same region, homes in the Derbyshire Dales rose by 7.1 percent, an increase of £23,711. Some London boroughs did see gains, including Kingston upon Thames, which rose by 3.3 percent, and Barking and Dagenham, where the average property price increased to £375,604.

Homeowners in Scotland and Wales also saw positive returns, with annual price rises of 2.3 percent and 2.6 percent, respectively. Despite these regional variations, overall house sales have seen a significant slump. In England, sales fell by 11,766 from 51,440 in May of the previous year to 39,674 in May of the current year.

Tom Evans, Sales Director at Purplebricks Estate Agency, commented on the market's resilience amidst a challenging economic backdrop. He noted that while buyer activity has softened, steady wage growth and better-than-expected employment figures are supporting potential movers. Evans added that homeowners remain in a strong position, with prices still approximately 25 percent higher than at the end of 2019, providing grounds for optimism in the market.