BLOGS

A tale of two markets

The UK housing market appears to be recovering on the surface. Nationwide's April 2026 data shows average house prices rising 3% year-on-year, with the national average now approaching £275,000. Combined with reports of supply reaching levels not seen since 2015, this paints a picture of a market finding its feet after several turbulent years.

Yet dig beneath the headline figures and a more complex story emerges. REalyse transaction data reveals that this national average conceals dramatic regional divergence—a genuine north-south divide that has profound implications for property professionals across the sector.

Regional performance: Wales leads, London lags

REalyse analysis of sales transactions over the past twelve months shows Wales leading the pack with 1.32% year-on-year price growth, closely followed by Scotland at 0.36%. These modest but positive figures stand in stark contrast to performance in southern England.

London has experienced the sharpest correction, with average sold prices falling 6.53% year-on-year. The South East (-2.64%), East of England (-2.57%) and South West (-2.44%) have all seen meaningful declines. Even the Midlands regions show softness, with East Midlands down 2.41% and West Midlands off 1.03%.

The price differentials remain substantial. London's average sold price of approximately £601,000 dwarfs Wales at £231,000 or Yorkshire and the Humber at £180,000. On a price-per-square-foot basis, London commands £653/sqft compared to just £182/sqft in Yorkshire—a gap that helps explain why affordability constraints are forcing demand northward.

Supply surge creates uneven market liquidity

The widely reported surge in supply is playing out unevenly across regions. REalyse active listings data shows London postcodes carrying significant stock: SW has over 17,000 active sales listings, SE nearly 13,000, and both W and E exceed 10,000 each. This represents a marked increase from the constrained supply environment of recent years.

Crucially, this stock is taking longer to shift in southern markets. Average days on market in London postcodes ranges from 62 to 70 days, with NW London properties sitting for nearly 70 days on average. Compare this to the North East, where Newcastle and surrounding areas (NE postcode) average just 45 days, or Leeds (LS) at 47 days. Northampton (NN) is clearing stock fastest at 44 days.

This disparity in market velocity reflects the demand imbalance at the heart of the current market. Buyers remain active but increasingly price-sensitive, gravitating toward regions offering better value while higher-priced southern markets adjust expectations.

Property type dynamics: Flats feel the pressure

The correction is not uniform across property types either. REalyse data shows flats experiencing the steepest price declines at nearly 14% year-on-year, with transaction volumes down 46% compared to the previous twelve months. This reflects a combination of factors: post-pandemic demand shifts away from urban apartments, persistent leasehold concerns, and cladding remediation costs affecting values in certain developments.

Semi-detached houses have proven most resilient, with prices essentially flat (-0.54%). Detached properties are down 1.88%, while terraced houses have softened by 4.02%. Transaction volumes have contracted across all types, down between 40-46%, suggesting buyers remain cautious despite improved mortgage availability.

For investors analysing opportunities, the £/sqft metric offers useful insight. Flats still command the highest price per square foot at £396/sqft nationally, reflecting their urban locations, but this premium is compressing. Detached properties at £354/sqft and semi-detached at £316/sqft may offer better relative value in current conditions.

What the data means for property professionals

For investors and lenders

The regional divide creates distinct opportunities. Northern regions and the devolved nations offer stronger price momentum and faster liquidity, albeit from lower absolute values. London and the South East present potential value opportunities for those with longer horizons, but careful comparable analysis is essential—REalyse data shows considerable micro-market variation within broader regional trends.

Yield dynamics remain crucial. REalyse rental data suggests gross yields in northern cities continue to outpace London, where capital values remain elevated despite recent corrections. Buy-to-let investors should model both yield and capital growth scenarios when comparing regions.

For developers

Supply pipeline data becomes increasingly important in a market where existing stock is rising. Understanding local planning permissions and development completions helps contextualise where supply may tighten or loosen. REalyse planning data shows continued residential permissions in growth corridors, but conversion rates and build-out timescales vary significantly.

For agents

Days on market metrics provide essential pricing guidance. Properties priced realistically for current conditions in southern markets are still achieving sales, but vendor expectations may need managing. The data shows a clear relationship between appropriate pricing and market velocity.

Outlook: Normalisation with persistent regional variation

The 3% headline growth figure suggests a market moving toward normalisation after the volatility of recent years. However, REalyse data indicates this recovery is highly regionalised. The north-south demand imbalance looks structural rather than cyclical, driven by affordability differentials and changing work patterns that have survived the post-pandemic period.

Supply increases should help moderate price growth in coming quarters, particularly in southern regions where stock is accumulating. For property professionals, granular local data will remain essential—national averages tell only part of the story in a market defined by regional divergence.