House costs are booming within the north of England, ONS figures reveal
- The typical home in the north east of England rose by 9.1% year-on-year
House prices are booming in the north of England, according to the latest figures from the Office for National Statistics.
The average house price in the north east of England rose by a staggering 9.1 per cent in the year to January.
In the north west, the typical home was fetching 6.8 per cent more in January this year, than it was 12 months prior.
The east midlands has also seen average prices rise by 6.2 per cent year-on-year, while the average house price for Wales was £210,000 in January, up 6 per cent from a year earlier.
The booming property market of the north marks a strong contrast to what’s happening to prices in the south.
In London, the average home rose in value by just 2.3 per cent in the 12 months to January, while in the south west of England, prices rose 2.7 per cent.
North-south divide: The price of the average home in the north east jumped by 9.1% in a year, with Wales, the east midlands and north west England all seeing annual inflation of 6%-plus
The price rises may have been impacted by a rush among buyers to complete transactions ahead of changes to stamp duty, due to happen on 1 April.
Jonathan Hopper, chief executive of buying agents Garrington Property Finders, said: ‘House price inflation has moved from brisk to breathless in the most affordable parts of the country.
‘England’s north-south divide is as stark as ever, even though average London prices have leapt back into growth territory after stagnating in 2024.
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts suggests the housing market is in a holding pattern down south.
‘Without another interest rate cut or intervention by the Chancellor in her Spring Statement, transaction levels are unlikely to change,’ said Reynolds.
‘The market remains sluggish, with prices holding up due to a lack of stock.’
Where will house prices go next?
Overall, house prices across the UK have risen by the largest level recorded since 2023 according to the ONS data.
The average home rose in value by 4.9 per cent in the 12 months to January and is now fetching £269,000.
Looking ahead, many market commentators think the future of house prices hinges very much on interest rates.
The ONS reported today that inflation fell to 2.8 per cent in the 12 months to February, down from 3 per cent in the year to January.
While inflation remains above the Bank of England target, this coupled with concerns about the sluggish UK economy could encourage the central bank to cut rates.
However, more recent house price data published by Zoopla yesterday covering the year to February showed slower house price growth.
It recorded a 1.8 per cent annual growth across the UK, 2.5 per cent in the north east, 3 per cent in the north west and 0.9 per cent in the south east.
Mark Harris, chief executive of mortgage broker SPF Private Clients said: ‘With inflation dipping to 2.8 per cent, this is encouraging news as far as future interest rate movements are concerned, and if this downwards trend continues, it will make it easier for the Bank of England to cut rates again sooner rather than later.
‘Another rate reduction would help boost the housing market and wider economy, and would be particularly timely with the stamp duty concession coming to an end this month.
‘On the mortgage front, a number of lenders have cut their rates on the back of lower swap rates, with sub-4 per cent rates once again available, which is encouraging news for borrowers.’
Buying agent, Jonathan Hopper, added: ‘The future course of the market will be determined by more conventional drivers like rent prices and interest rates.
‘At present soaring rent increases continue to nudge many tenants into buying their first home.
‘With economic growth slowing and consumer inflation easing, the Bank of England may be tempted to cut the base rate again in coming months, and the prospect of cheaper borrowing should keep nudging property prices upwards.’
