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A two-speed UK sales market

Twelve months of transaction data tell a clear story: the UK's housing market is no longer moving as one. REalyse's analysis of sales transactions across England's regions, Scotland and Wales shows that while most of the country is seeing prices flatten or fall, a handful of markets — Wales, Scotland, and by most public indices Northern Ireland — are still recording positive annual growth.

Across England as a whole, average sold prices are down 3.86% year-on-year, with London posting the steepest decline at -6.39% and an average sold price of £600,343. The South East (-1.75%), Yorkshire and the Humber (-1.65%) and the East of England (-1.55%) all registered similar mid-single-digit percentage declines. Only the North West bucked the English trend with modest growth of 0.31%, while the North East was essentially flat.

Contrast that with Wales, where REalyse transaction data shows average sold prices up 2.57% annually — the strongest growth rate in our regional dataset — and Scotland, up 1.13%. Northern Ireland is not fully represented in REalyse's transaction coverage for this period, but official indices, including the NI Residential Property Price Index and major lender house price trackers, have consistently placed it at or near the top of the UK growth table over the past year. For institutional investors and lenders tracking regional allocation, this divergence is becoming too large to treat as noise.

Why the East of England is lagging

The East of England — the ITL1 region that includes East Anglia — is a useful case study in where the slowdown is biting hardest outside London. REalyse data shows average sold prices in the region at £369,440, down 1.55% over the past year, with an average sold price per square foot of £374. Transaction volumes remain substantial, at over 88,000 sales in the latest 12-month period, and average days on market sit at 86 — broadly in line with the England-wide average of 88.

Affordability pressure is a plausible part of the explanation. REalyse's demographic data indicates households in the East of England are typically spending around 37.5% of income on rent, a level that sits well above commonly cited affordability thresholds of 30%. Average annual income in the region peaks in the 40-44 age band at roughly £57,600, which has historically supported some of the highest average price points outside London and the South East. When prices climb well ahead of local incomes over a sustained period, the correction — or at least the pause — tends to show up first in exactly these higher-value commuter markets, where buyers have the least headroom to absorb higher mortgage rates on larger loan sizes.

There is also a structural point for developers and lenders to weigh: the East of England's price-per-square-foot premium (£374, second only to London and the South East among English regions) means affordability stress bites earlier here than in lower-value regions, even when nominal price falls look modest.

What's different about Northern Ireland, Scotland and Wales

The common thread across the UK's stronger-performing nations is a lower price base relative to local incomes, combined — in Northern Ireland's case — with a housing market that is still working through a slower, more gradual recovery from the 2007-2008 crash than the rest of the UK experienced. Average sold prices in Wales (£234,196) and Scotland (£237,105) sit roughly 30-35% below the England-wide average of £342,298, and both show average price-per-square-foot figures in the £220-£236 range versus £349 for England as a whole. Northern Ireland's price base is understood to be lower still relative to UK norms, which structurally leaves more room for percentage growth even on comparatively modest cash increases.

Local employment patterns likely reinforce this. Public sector employment shares remain proportionally higher in Northern Ireland and Wales than the UK average, which tends to produce more stable household incomes through periods of economic uncertainty — a factor that matters more to housing demand resilience than headline wage growth alone. Days on market data lends some support to this reading: Wales recorded the fastest average sale timeline in REalyse's regional dataset at just 67 days, well below the England average of 88 and Scotland's 94, suggesting genuine buyer competition for available stock rather than a market propped up purely by low volumes. Wales also recorded over 10,000 transactions in the latest 12-month period and Scotland close to 39,700, indicating these are liquid, active markets rather than thin ones skewed by a handful of high-value outliers.

Implications for investors, lenders and developers

For institutional investors and lenders running UK-wide portfolios, this is a reminder that "the UK market" is increasingly a misleading shorthand. A lender assessing collateral risk purely against a national house price index could be materially misstating exposure in regions like the East of England or London, where average prices and price-per-square-foot are both elevated and declining simultaneously — a combination that warrants closer underwriting scrutiny on loan-to-value assumptions.

Conversely, for developers and buy-to-let investors scanning for relative value, REalyse's comparables and yield data make it possible to stress-test whether Northern Ireland, Scotland and Wales's growth is being matched by proportionate rental demand and planning pipeline activity, or whether it is running ahead of local income growth in specific postcode districts — the same dynamic that appears to be cooling demand in the East of England. Cross-referencing REalyse's planning and demographic datasets at a local authority level, rather than relying on national or even regional averages, remains the more defensible basis for sourcing and underwriting decisions in a market this fragmented.

Outlook

The gap between the UK's strongest and weakest-performing housing markets looks set to persist into the next reporting period. Barring a shift in mortgage rate expectations or a material change in regional employment conditions, markets with lower price-to-income ratios — Wales, Scotland and, per external indices, Northern Ireland — appear better positioned to sustain modest growth, while higher-value regions like London and the East of England may continue to see prices recalibrate against affordability constraints. For professional investors, the message is less about calling a UK-wide top or bottom, and more about pricing in that regional divergence directly into deal assumptions.