"While the outlook is best in Scotland and Northern England, there is a spread right across the UK reflecting the demand for and affordability of homes. "
- Richard Donnell, executive director at Zoopla
New analysis from Zoopla reveals that housing markets in Scotland and Northern England have the best prospects for house price growth in 2025, as Southern England continues to adjust to the impact of higher mortgage rates.
Zoopla has assessed a range of key housing indicators including the affordability of homes, how quickly property is selling, how much asking prices are being cut to attract demand and how many homes have been on the market for more than six months. These factors have been collated and ranked across 120 postal areas of the UK to create an overall ranking of the areas with the best prospects for 2025.
The UK housing market returned to growth in 2024 as incomes grew, mortgage rates fell and sales volumes recovered. House price inflation varies widely across the UK with faster price inflation outside southern England.
Scotland leads the rankings in the UK
Housing markets in Scotland lead the rankings in the UK, accounting for nine out of the top ten slots. The overall leader is the Motherwell postal area in Scotland, where house prices average at £129,000 and are already increasing by an above average rate of 3.8%. The top five UK housing markets are in Eastern Scotland, in and around Glasgow covering Motherwell, Glasgow, Paisley, Falkirk and Kirkcaldy postal areas.
House prices in Scotland are among the cheapest in the UK compared to incomes, while homes are generally faster to sell in Scotland as the system for selling homes is different. However, removing time to sell from the ranking criteria still sees areas in Scotland taking eight out of the ten places in the top ten table.
Motherwell is already registering the fastest house price growth in Scotland (3.8%) followed by 3.5% in Falkirk against a 2.6% average for Scotland as a whole.
Aberdeen is at the bottom of the ranking for Scotland and is a market that has been struggling from low investment in the oil and gas industry, a key driver of the economy in North East Scotland.
Markets in Northern England have the best prospects for price growth in 2025
The markets with the best prospects for 2025 in England are led by Newcastle, closely followed by Leeds, Stoke-on-Trent, Wigan and Carlisle. Housing affordability typically sits below the national average level, creating headroom for price rises provided local economies grow and create jobs. House prices are rising between 2% and 5% across these areas, with prices in Wigan already rising at 5% a year.
Wolverhampton is the one area outside Northern England in the best-ranked markets where asking price reductions of over 5% are low and house prices sit at just over £201,000. This is 13% below the West Midlands average, offering home buyers better value for money.
The areas with the lowest rankings for 2025 are found in inner London and across Southern England. This is primarily a function of higher property prices, as these markets continue to adjust to the impact of higher mortgage rates through longer sales times and greater asking price reductions. Central, South West, North West and West London sit at the bottom of the rankings, due to longer sales times and average house prices over £635,000. This is more than double the UK average and higher than the London average price (£535,000).
Other areas of London are higher in the rankings as house prices are lower and more accessible to a wider range of buyers. The highest-ranked is Sutton in outer South London, with a time to sell of 33 days and just 14% of homes seeing asking price reductions compared to almost 20% in London.
Some coastal towns in Southern England like Bournemouth and Torquay also sit in the bottom ten markets due to a reversal of pandemic factors and incoming tax changes on second homes. Others are in closer proximity to London, including Tunbridge Wells and Canterbury, where prices grew quickly over the pandemic and local markets are adjusting to higher mortgage rates.
Price falls in these lower-ranked areas aren’t expected in 2025, but house prices are likely to rise more slowly than incomes as affordability continues to reset in the face of higher mortgage rates. Value for money is slowly returning to the London property market after a decade of below-average growth. Although many London areas sit at the bottom of the rankings, prospects in London are much improved on those over recent years.
Strong market in southern coastal towns in Wales
In Wales, the markets with the best prospects are found in southern Wales where there is a greater concentration of jobs and economic activity led by Cardiff and Newport.
Market conditions are less strong in mid and northern Wales where house prices rose very quickly over the pandemic during the search for more space. These areas are now facing weaker demand in the face of affordability pressures and a modest reversal of pandemic trends. House prices in Wales are 30% higher since the start of the pandemic in 2020, compared to an 8% increase in London and 20% at a UK level.
Northern Ireland
House prices are currently rising fastest in Northern Ireland, running at almost 7% year-on-year, as values rebound off a low base after lagging behind the rest of the UK over the last decade. The resolution of trading arrangements post-Brexit is a key factor supporting increased housing demand. The BT postal area covering Northern Ireland is ranked number 19 out of 120, with 20 days to sell a home and just 10% of properties cutting asking prices. House prices in Northern Ireland will continue to increase quickly over 2025 as prices start to catch up with the rest of the UK.
Richard Donnell, executive director at Zoopla, commented: “The housing market returned to growth in 2024 with more sales and higher prices as mortgage rates fell. We expect average UK house prices to increase by 2.5% in 2025. Our analysis of key local market indicators reveals the areas where there is scope for increased numbers of home moves and house prices to increase at an above-average rate over 2025. While the outlook is best in Scotland and Northern England, there is a spread right across the UK reflecting the demand for and affordability of homes.
“Home values are likely to rise at a lower rate in areas towards the bottom of the rankings. Value for money is slowly returning to the London property market after a decade of below-average growth so while many London areas are towards the bottom of the rankings the prospects in London are much improved on those over recent years.
"Serious sellers looking to move home in 2025 need to consider the local market fundamentals which will have an impact on how you price your home. Speaking to local agents is the best way to get insight into local conditions and how to price your home for a sale.”
