"Home value growth has been weaker across southern England and particularly in London. A combination of high prices and higher mortgage rates has reduced buying power, and this has been reflected in flat prices and modest price falls in inner London"
- Richard Donnell - Zoopla
New analysis from Zoopla has revealed that one million homes across the UK have increased in value by 50% or more since the pandemic, equating to an average gain of £117,400. The research, based on market data over the past five years, also shows that eight in ten homes have seen value growth of more than 5%, with average increases of £60,800.
Since 2020, house prices have risen by an average of 20%, despite fluctuations in buyer demand, particularly during 2023 when borrowing costs rose. However, the national trend masks wide regional variation.
Northern regions and Wales lead on value growth
Over half of the homes with 50% or greater value increases are located in the North West, Yorkshire and the Humber, and Wales. These areas have recorded average increases of £77,100, £86,200 and £90,700 respectively. Analysts link the growth to a combination of factors, including shifting lifestyle preferences during the pandemic and affordability challenges that pushed more buyers to these regions.
Zoopla notes that rising rental prices in many of these cities have prompted more first-time buyers to purchase homes, particularly in locations where ownership remains a more cost-effective option. Buyer interest has remained relatively strong in these markets, even as mortgage rates increased in 2023.
Two specific growth hotspots have emerged from the data. In South Wales, proximity to Cardiff and access to surrounding rural areas have boosted local values. Areas such as Blaenau Gwent and Merthyr Tydfil saw a three-in-ten increase in the value of homes by at least 50% over the last five years. The average gains in these towns were £49,900 and £51,100 respectively.
Similarly, urban centres around Liverpool and Manchester have seen strong price rises. In Rochdale, Oldham, and Bolton, homeowners were more likely to experience a 50% or higher increase, with average uplifts of £64,300, £62,900 and £64,300. Lower starting values in these towns have made them more susceptible to high percentage increases, even when monetary gains were modest.
South sees modest growth, with pockets of decline
While southern England has also seen value increases, the scale has been more limited. Half of homes in the region have seen gains of less than 20% since 2020. London homes, for example, rose by an average of £47,700, while those in the South East gained an average of £62,000. Only 2% of homes in the South recorded value increases above 50%, although these gains typically surpassed £200,000.
Larger increases in the South tend to be concentrated in specific locations, including coastal areas and regions of natural beauty. In the Isle of Wight, for example, homes that increased in value by at least 50% saw average gains of £182,400.
London has experienced more volatility, with 13% of homes declining in value by 5% or more since the pandemic, averaging losses of £34,000. These declines have largely occurred in high-value central boroughs such as Westminster and Kensington and Chelsea, where close to half of the homes are now valued below their June 2020 level.
This pattern reflects a combination of high entry prices, increased borrowing costs, and tax changes that have made property investment less attractive, particularly for landlords.
Aberdeen has also recorded notable losses. More than half of homes in the city have seen values decline, with an average drop of £25,700. The fall is attributed to the contraction of the oil and gas industry in the North Sea, which has long underpinned the city’s housing demand.
“Our latest analysis clearly shows there is no single housing market and that house price trends vary widely across the UK,” said Richard Donnell, executive director at Zoopla. “One million UK homes have seen their value increase by 50 per cent or more over the last five years as higher mortgage rates and rising rents encourage home buyers to seek out value for money in localised markets across northern England and Wales.
“Home value growth has been weaker across southern England and particularly in London. A combination of high prices and higher mortgage rates has reduced buying power, and this has been reflected in flat prices and modest price falls in inner London."
“The UK currently has the most homes for sale in seven years. It's critically important that serious sellers fully understand the local market dynamics impacting the value of their home and seek the advice of agents on where to set the asking price for their home in order to achieve a sale.”
Nathan Emerson, CEO of Propertymark, comments, “This rise in house prices is positive for homeowners, especially when considering the current condition of the economy."
“For people already on the property ladder, this will increase equity, provide greater refinancing opportunities, and may make it easier for those who wish to move into a bigger, more expensive home to do so.
“However, for first-time buyers, this presents the potential for further restrictions such as increased costs, affordability challenges and greater competition from other buyers, which could drive up prices even further.
“Even with mortgage providers introducing more competitive mortgage deals, help for first-time buyers is needed as house prices continue to rise. This has pushed the average deposit needed to over £70,000, which is likely to be unrealistic for many people.”
Matt Thompson, head of sales at estate agency Chestertons, said, “In London, buyer demand has remained relatively strong over the past weeks, which is resulting in stable or increasing property values in certain areas. Other parts of the capital, such as prime central London, however, have seen a slight price adjustment, which is giving more domestic buyers the opportunity to purchase a property in sought-after locations within their initial budget.”
