Why the North is outperforming the South in the housing market - and 4 towns and cities leading the trend

But convention has been turned on its head, with northern towns and cities now outperforming the South when it comes to house price rises.

Mortgage specialist Sam Fox, founder of the UKMC, believes northern cities and towns - most notably Liverpool, Wigan, Rochdale and Blackburn - are uniquely positioned to benefit from the current market situation.

Sam said: “Early 2026 really is a tale of two markets. In Northern England, Scotland and Northern Ireland, prices are still edging up, while several southern regions are either flat or in modest decline.

“Official figures show the North East leading England for house price inflation at around 6.8% over the past year, while London sits at the bottom with prices down about 1.2%.

“On the rental side, the contrast is even sharper: private rents in the North East are rising at 7.9% a year, compared with 2.1% in London.

“Zoopla’s latest data underlines the same split. The North West saw average prices rise by 3.5% over 2025, with towns such as Liverpool, Wigan, Rochdale and Blackburn posting gains of more than 4% from relatively modest price levels below about £205,000.

“At the same time, London recorded a 0.7% annual fall and now has 14% more homes for sale than a year ago, while the North West has 7% fewer, tightening choice for buyers.

“People keep asking whether the market is ‘up’ or ‘down’, but that’s the wrong question. The UK isn’t one market any more.

“In the North, what I see day‑to‑day is a normal, functioning market: buyers can still do the sums, sellers are realistic, and well‑priced homes actually move.

“In parts of the South, especially the pricier pockets, the math is tougher.”

Below are the five key causes Sam thinks are behind the differing housing markets in the North and South, and his advice for people looking to buy a house.

Affordability is the real divide

“In the North West, prices were up just over 3% last year, while London actually slipped slightly, and you can feel that difference when you talk to buyers.

“More households in the North can still borrow sensibly and keep monthly payments within reach, especially when you’re looking at houses under £250,000 rather than over £500,000.

“In the South, plenty of people still want to buy, but more of them are capped by income and stress‑tests. They might love the house, but if the numbers don’t work, they don’t proceed. That one shift takes a lot of heat out of prices in the higher‑value regions.”

Stock is moving in opposite directions

“In the North West, the number of homes for sale is about 7% lower than a year ago, which means buyers are chasing a smaller pool of decent stock.

“In London, agents are dealing with 14% more homes on the market, and there’s extra stock across much of southern England.

“This influences the tone of every negotiation.

“Where stock is tight, sellers don’t have to panic‑cut and well‑presented homes can still sell close to asking.

“Where stock has built up, buyers slow down, they haggle, and they expect 2026 pricing, not 2021 pricing.

“That’s exactly the difference I’m seeing between places like Liverpool or Leeds and some outer‑London postcodes.”

Why landlords are heading north

“The latest ONS figures show rents in the North East rising at nearly 8% a year, while London is just over 2%.

Combine that with lower purchase prices in many northern postcodes, and the yield gap becomes hard to ignore.

“It’s no surprise more landlords and portfolio buyers are looking north and across the Midlands.

“Higher‑priced southern areas can still work for investors, but the margin for error is thinner.

“In a lower‑priced northern market, it’s easier to make the yield stack up even if rates don’t fall as quickly as people hope. That extra buffer is worth a lot in an uncertain environment.”

Is the North just one ‘hotspot’?

“What I like about the current northern performance is that it isn’t just one city having a moment.

“You’ve got places like Liverpool, Wigan, Rochdale and Blackburn all posting solid growth off sensible price points, and Scotland and Northern Ireland also leading the UK on annual price gains. That breadth makes it feel more sustainable.

“I see this as a catch‑up phase after years where London and the South hoovered up most of the growth.”

So what should you do in 2026?

“If you’re a first‑time buyer in the North, your edge is that you can still move without feeling every offer is a stretch.

“You still need your finances in order and you need to be ready to act, because good homes go quickly, but the gap between income and prices is more forgiving.

“If you’re selling in the South to move north, be realistic on your sale price and disciplined on your purchase. That trade‑up gap between a southern flat and a northern house is where a lot of value sits right now.

“For investors, the conversation has shifted. I’m not saying ‘never buy in the South’. I’m saying: compare rent growth, yields and stock levels, not just headline prices.

“For many buyers and landlords in 2026, those numbers increasingly point north of the old dividing line.”

If you’re looking for more property news, you might be interested in our look at the UK’s top cities, ranked among the top 100 in Europe.