More than one million UK homes have increased in value by 50% or more since the onset of the pandemic, according to new research by Zoopla, with growth concentrated in northern England and Wales.
The property portal’s analysis reveals that average gains for these homes reached £117,400 over the past five years.
Overall, 80% of UK homes are now worth at least 5% more than in 2020, with average gains of £60,800.
Despite a slowdown in buyer demand in 2023 caused by rising mortgage rates, property values have increased by an average of 20% across the country since the start of the pandemic.
KEY DRIVERS
More than half of homes that saw 50% or more in value growth are located in the North West, Yorkshire and the Humber, and Wales.
Average value increases in these areas were £77,100, £86,200 and £90,700 respectively. Analysts point to a combination of pandemic-era lifestyle shifts, strong rental growth and the relative affordability of these markets as key drivers.
South Wales emerged as a standout region, with towns such as Blaenau Gwent and Merthyr Tydfil seeing nearly one in three homes grow in value by 50% or more – equivalent to average increases of £49,900 and £51,100.
In the North West, areas such as Rochdale, Oldham and Bolton also recorded sharp increases, with average gains of more than £60,000.
By contrast, just 2% of homes in southern England recorded value increases of 50% or more.
In London, 13% of homes fell in value by at least 5% – the average loss reaching £34,000 – with the steepest declines seen in Westminster and Kensington and Chelsea.
Price falls were also seen in Aberdeen, where more than half of homes declined in value due to the long-term contraction of the oil and gas sector.
ONE MILLION HOMES
Richard Donnell, Executive Director at Zoopla, said: “Our latest analysis clearly shows there is no single housing market and that house price trends vary widely across the UK.
“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.
REDUCED BUYING POWER
And he added: “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. It’s 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.”
PRICE ADJUSTMENTS
Matt Thompson, Head of Sales at estate agency Chestertons, says: “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.”
GREATER OPPORTUNITIES
Nathan Emerson, Chief Executive of Propertymark, says: “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.”
