The “Burnham bounce” has spread to the property market, fueling the North as prices in the South tumble, figures suggest.
Experts say new PM Andy Burnham’s championing of the North has given the housing market an added boost. Data from high street bank Lloyds showed the strongest house price growth in England last month was concentrated in northern regions.
North leads, South lags
The North East saw prices rise by an average 2.8%, to a typical £182,488, while the North West saw prices rise 2.1% to £247,836. By contrast, the weakest regional markets remain in southern England. The South East saw prices fall by 2% year-on-year to £381,146, while Greater London recorded a 1.3% decline to £533,930.
It comes amid signs that Mr Burnham’s appointment as Labour PM - and the run-up - has helped, along with the weather and England’s World Cup run, lift the mood of the nation.
Expert views
Nicholas Finn, managing director of Garrington Property Finders, said: “The buzz surrounding Number 10 North, and the prospect of job creation and government investment in northern areas, are boosting sentiment and supporting the upward trajectory in prices.”
He warned a glut of homes in southern areas meant there were “too few serious buyers”. And he added: “Buyers are often able to ask for, and get, reductions on the asking price. Meanwhile many struggling sellers are cutting prices pre-emptively to attract interest, with those putting their home on the market now often facing an uncomfortable reality check on their price expectations.”
Price changes
The average home in Greater London has tumbled in value by almost £6,000 in the past year, Lloyds’ data suggests. The average fall in the south east as a whole is around £7,100. Average prices in the North West, on the other hand, have jumped by more than £5,500 in the past year. The rise in the North East is more than £5,200 on average.
Affordability is also an issue, given the yawning price gap between the north and the south.
UK overview
House prices averaged across the whole of the UK showed no growth last month, as mortgage rates edged higher in the face of global economic uncertainty. The national average stood at £299,253. Northern Ireland saw the strongest growth in prices across the UK, with prices up 7.4% year on year for July at £231,131. It compares with 3.6% growth in Scotland and a 1.6% increase in Wales.
Amanda Bryden, head of mortgages at Lloyds, said the UK housing market “remained steady” in July. She added: “Average house prices have remained relatively stable for almost two years, moving within a narrow range over that period and sitting just 0.5% higher than they were in November 2024.
“That trend has persisted even as buyers and sellers have faced a more uncertain economic backdrop this year. Affordability remains a challenge for many would-be buyers and, following recent events in the Middle East, mortgage rates have edged higher again after easing earlier in the summer.”
It comes after lenders have been hiking their mortgage rates in recent weeks, despite the base rate being held at 3.75%. The Bank of England kept rates unchanged again last week, but cautioned inflation was set to rise by the end of the year due to the Iran war and signalled it stood ready to hike if the conflict and its effects on prices was prolonged.
Ms Bryden added: “Looking ahead, we expect market activity and house prices to remain relatively stable over the remainder of the year. Developments will be shaped by both how mortgage rates respond to the outlook for inflation and wider household confidence.”
Amy Reynolds, head of sales at estate agency Antony Roberts, based in Richmond in south west London, claimed: “London needs more support from Government, not less. This is where the money is generated, yet policies like the proposed mansion tax disproportionately hit people who are already working long hours and enduring long commutes just to be here.”
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “Wage growth outpacing property price inflation continues to counter-balance the amount of stock, especially flats, overhanging the market as well as concerns over the likelihood of mortgage rate and inflation rises.
“We are increasingly hearing on the ground too speculation about property tax changes in the Budget becoming more of a factor in decision-making. The result is a stand-off between buyers and sellers but some price-softening if sellers are serious about getting their transactions over the line.”
