The north of England – led by the north west – continues to outperform the south with another annual house price jump ahead of the UK average.
For a number of years now, the hot market in the south of England has cooled slightly to be surpassed by growth seen in the north of England. This is down to a number of factors, from levelling up improving the prospects of the north, to people looking to the north as a more affordable option.
In the latest house price index from Nationwide, this trend has strongly continued, with the latest annual price change in the north of England recorded at 2.9% for Q2 2024 compared with Q2 2023. The north in this report constitutes the north west, the north east, Yorkshire and the Humber, and the East and West Midlands.
Meanwhile, the north west continues to be the strongest performing region of England, according to Nationwide, after seeing its prices climb by 4.1% this quarter compared with the same time last year, which is matched only by Northern Ireland’s growth.
Looking at the month-on-month figures, Nationwide’s report shows an overall 0.2% rise in June, with an annual uplift of 1.5% – which is surpassed by almost every part of the north of England. The average UK house price is now £266,064, according to these figures, on a non-seasonally adjusted basis.
The prevailing north of England
The regional towns and cities across the north of England have enjoyed above-average growth in their property markets for some time now, and most forecasts point to this trend continuing for the foreseeable future.
In the south, average house prices remain considerably higher, particularly in and around London and the south east. While these locations remain extremely popular among homebuyers and investors alike, the improving economies and amenities of the north of England have been enticing more people and businesses away from the south.
There has also been a greater amount of investment taking place across the north of England, both private and government-backed. This includes a number of Town Deals, the Future High Street Fund, and new Investment Zones being set up in numerous locations across the northern regions.
Despite the controversial scrapping of the UK’s high-speed rail project, HS2, other extensive infrastructure projects are underway or in the pipeline, which will continue to make the north of England an increasingly popular area, boosting the housing market in the process.
Commenting on the latest figures, Robert Gardner, Nationwide’s Chief Economist, said: “Across England overall, prices were up 0.6% compared with Q2 2023, while Wales and Scotland both saw a 1.4% year-on-year rise.
“Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands), continued to outperform southern England, with prices up 2.4% year-on-year.”
London is picking back up
Meanwhile, according to Nationwide’s figures, London appears to be having a reversal of previous trends, where it had been lagging behind much of the rest of the country in terms of house price growth.
Now, it is the best performing southern region, with annual price growth of 1.6% in this report. However, the south of England as a whole – encompassing the south west, outer south east, outer Metropolitan, London and East Anglia – experienced an annual house price fall of -0.3%.
North of England favours sellers
The north of England’s high level of demand among homebuyers and property investors could make it more of a seller’s market than elsewhere in the country, according to Iain McKenzie, CEO of The Guild of Property Professionals.
He said: “This is the last litmus test on the state of the property market before the General Election and it is fair to say that while challenges remain, stability has returned to house prices in recent months.
“A modest rise in June follows the trend of steady price growth we have seen since the start of the year.
“While some may argue prices are stagnating, affordability concerns still loom for many Brits and there is a delicate balance to appease buyers and sellers alike.
“The regional picture is more mixed and we are seeing a greater adjustment in house prices happening in the South, where prices in many areas have been inflated for years.
“Meanwhile, regions in the North of England have seen higher levels of demand, creating a market that favours sellers.
“We would like to see first-time buyers being prioritised in the coming months, regardless of which party forms the next government. While house price growth is welcome news for sellers, it undeniably makes it harder for those still saving for a deposit to get on the property ladder.
“A renewed push to ramp up the rate of homebuilding would be a good place to start, particularly for properties that are considered more affordable.
“There is also the possibility that we may see a new help-to-buy scheme rolled out in the near future, which would go a long way towards encouraging potential buyers to get saving.”
The rest of 2024 “looks brighter”
Nicky Stevenson, Managing Director at the national estate agent group Fine & Country, may be of interest.
She said: “The housing market is showing fresh signs of stability as prices edged up by 0.2% in June and increased 1.5% year-on-year.
“The recovery seen in recent months has pushed prices closer to their peak in summer 2022, but there still remains a deficit of approximately 3%.
“Buyers continue to face significant headwinds with higher borrowing costs impacting turnover, but the outlook for the rest of the year does look brighter with interest rates set to fall.
“The landscape across the UK varies significantly with Northern Ireland and [the north of England] registering stronger house price growth than southern England.
“The South West and East Anglia recorded negative house price growth in the second quarter of this year as affordability issues restrict home moving activity.
“The challenge for the incoming government is to inject life back into the housing market in the south of England, where activity has been largely subdued for some time.
“Lower interest rates will go some way to tackling this issue, but what’s really needed is a more systematic approach to building homes that meet market demands.
“If we can increase the stock of housing in the UK, then we can reduce the pinch points where affordability issues are greatest.”
