Zoopla report highlights sharp regional differences in post-COVID property growth
One million homes across the UK have increased in value by at least 50% since the onset of the pandemic, with the average gain standing at £117,400, new figures from property portal Zoopla have indicated.
The analysis shows that 80% of homes have risen by more than 5% in value, with typical homeowners seeing gains of £60,800.
House prices have climbed by an average of 20% nationwide over the past five years. However, growth has not been uniform, with northern England and Wales experiencing the sharpest increases. This comes despite a slowdown in buyer demand in 2023, attributed to higher borrowing costs.
More than half of the homes that saw values rise by 50% or more are located in the North West, Yorkshire and the Humber, and Wales. Average increases in these regions were £77,100, £86,200, and £90,700 respectively.
Analysts point to shifting buyer preferences during the pandemic and strong rental growth as key drivers, with many first-time buyers opting for more affordable locations. These markets have maintained above-average interest even as mortgage rates climbed last year.
South Wales and urban centres in the North West have emerged as hotspots. In areas like Blaenau Gwent and Merthyr Tydfil, around 30% of homes saw values jump by at least 50%, with average increases of £49,900 and £51,100.
Similarly, towns near Manchester and Liverpool, such as Rochdale, Oldham, and Bolton, recorded significant growth, with average gains exceeding £62,000. Lower starting prices in these areas mean that even modest monetary increases translate into high percentage growth.
In contrast, southern England has seen more modest gains. While some areas in the expanded London commuter belt have benefited, high property prices and elevated mortgage rates have dampened demand, resulting in price falls in certain locations. Just 2% of homes in the south recorded value gains of 50% or more, with the average increase above £200,000. Notably, the Isle of Wight saw homes with 50% gains rise by an average of £182,400.
London’s market has faced particular challenges, with 13% of homes losing at least 5% in value, averaging a £34,000 drop. The declines are concentrated in central boroughs such as Westminster and Kensington and Chelsea, where nearly half of homes are now worth less than in June 2020.
High prices, increased mortgage costs, and tax changes affecting landlords have all contributed to the capital’s subdued performance. Aberdeen has also seen over half of its homes lose value, largely due to the shrinking oil and gas sector.
“Our latest analysis clearly shows there is no single housing market and that house price trends vary widely across the UK,” said Richard Donnell (pictured right), executive director at Zoopla. “One million UK homes have seen their value increase by 50% 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 have 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. Its critically important 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.”
According to Nathan Emerson, chief executive of industry body Propertymark, the 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,” Emerson said.
“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.”
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