It definitely won’t be grim up North for the property market in 2025 with homes in Northern England and north of the border in Scotland expected to soar compared to London and the south east.
New analysis from Zoopla reveals that housing markets in Scotland and Northern England have the best prospects for house price growth in 2025.
But it cautions that Southern England continues to adjust to the impact of higher mortgage rates.
Zoopla has assessed a range of key housing indicators including the affordability of homes, how quickly property is selling, how much asking prices are being cut to attract demand and how many homes have been on the market for more than six months.
These factors have been collated and ranked across 120 postal areas of the UK to create an overall ranking of the areas with the best prospects for 2025.
The UK housing market returned to growth in 2024 as incomes grew, mortgage rates fell and sales volumes recovered. House price inflation varies widely across the UK with faster price inflation outside southern England.
Housing markets in Scotland lead the rankings in the UK, accounting for nine out of the top ten slots.
Wolverhampton is the one area outside Northern England and Scotland in the best-ranked markets where asking price reductions of over five per cent are low and house prices sit at just over £201,000. This is 13 per cent below the West Midlands average, offering home buyers better value for money.
The overall leader is the Motherwell postal area in Scotland, where house prices average at £129,000 and are already increasing by an above average rate of 3.8 per cent. The top five UK housing markets are in Eastern Scotland, in and around Glasgow covering Motherwell, Glasgow, Paisley, Falkirk and Kirkcaldy postal areas.
House prices in Scotland are among the cheapest in the UK compared to incomes, while homes are generally faster to sell in Scotland as the system for selling homes is different. However, removing time to sell from the ranking criteria still sees areas in Scotland taking eight out of the ten places in the top ten table.
Motherwell is already registering the fastest house price growth in Scotland (3.8 per cent) followed by 3.5 per cent in Falkirk against a 2.6 per cent average for Scotland as a whole.
Aberdeen is at the bottom of the ranking for Scotland and is a market that has been struggling from low investment in the oil and gas industry, a key driver of the economy in northeast Scotland.
The markets with the best prospects for 2025 in England are led by Newcastle, closely followed by Leeds, Stoke-on-Trent, Wigan and Carlisle.
House prices are rising between two per cent and five per cent across these areas, with prices in Wigan already rising at five per cent a year.
The areas with the lowest rankings for 2025 are found in inner London and across Southern England.
Central, South West, North West and West London sit at the bottom of the rankings, due to longer sales times and average house prices over £635,000. This is more than double the UK average and higher than the London average price (£535,000).
Other areas of London are higher in the rankings as house prices are lower and more accessible to a wider range of buyers. The highest-ranked is Sutton in outer South London, with a time to sell of 33 days and just 14 per cent of homes seeing asking price reductions compared to almost 20 per cent in London.
Some coastal towns in Southern England like Bournemouth and Torquay also sit in the bottom ten markets due to incoming tax changes on second homes. Others are in closer proximity to London, including Tunbridge Wells and Canterbury, where prices grew quickly over the pandemic and local markets are adjusting to higher mortgage rates.
Although many London areas sit at the bottom of the rankings, prospects in London are much improved on those over recent years.
In Wales, the markets with the best prospects are found in southern Wales where there is a greater concentration of jobs and economic activity led by Cardiff and Newport.
House prices are currently rising fastest in Northern Ireland, running at almost seven per cent yoy. The resolution of trading arrangements post-Brexit is a key factor supporting increased housing demand.
Richard Donnell, executive director at Zoopla, comments: “The housing market returned to growth in 2024 with more sales and higher prices as mortgage rates fell. We expect average UK house prices to increase by 2.5 per cent in 2025.
“While the outlook is best in Scotland and Northern England, there is a spread right across the UK reflecting the demand for and affordability of homes.
“Value for money is slowly returning to the London property market after a decade of below-average growth so while many London areas are towards the bottom of the rankings the prospects in London are much improved on those over recent years.
“Serious sellers looking to move home in 2025 need to consider the local market fundamentals which will have an impact on how you price your home. Speaking to local agents is the best way to get insight into local conditions and how to price your home for a sale.”