North-south divide in property to continue in 2025
House prices are expected to increase by 2.5% in 2025, according to Zoopla, and the ongoing north-south divide will see a lower growth in prices in the south of England compared to other regions. This is because of the relative affordability of houses in many areas in the UK as well as how prices have climbed relative to household incomes.
House prices in the capital have climbed by 83% since 2010. In the southern regions of England, that figure is 70%. For the Midlands, it’s 66% and in Wales the rise has been 56%.
At the lower end, Northern Ireland has seen a rise of just 19% while Scotland’s house prices have risen by 30%. But highlighting England’s north-south divide, the north of England has seen a 41% rise.
The outlook for the housing market in 2025, Zoopla says, will be decided by the strength of the economy and labour market as well as the trajectory of mortgage rates. All of this will be in the context of the relative affordability of houses in different areas of the country.
It expects mortgage rates to stay at the current levels with buyers likely to be price-sensitive when faced with increased uncertainty in the economy and the impact that budgets have on the job market. Zoopla predicts a 2.5% rise in prices over 2025 and 1.15 million sales, up from 1.1 million in 2024.
“Buyers and sellers returned to the housing market in 2024 having delayed moves in the face of higher mortgage rates,” Richard Donnell, Executive Director at Zoopla comments. “There is a sizable pipeline of sales that will complete in the first half of 2025 with many hoping to avoid higher stamp duty costs from next April.
“More sales have supported a return to house price growth across the country but home buyers have become more price-sensitive in recent weeks as mortgage rates drift higher. Affordability constraints will keep the pace of house price growth in check over 2025 but there will be enough price inflation to support 5% more home moves.”
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