Scotland and Northern Ireland are outshining England and Wales in terms of house price inflation, with both regions experiencing strong gains in 2023 despite the troubled economic climate.
The analysis comes from London lettings and estate agent, Benham and Reeves, which looked at house price growth on both a regional and local authority level to reveal which areas have provided homeowners with a candy cane return since last Christmas, versus those who have yielded a lump of coal.
The research shows that in Scotland house prices rose by 3.6% year-on-year, amounting to a £6,615 uplift on the average property price, while they also rose by 2.5% in Northern Ireland, with the country’s housing stock making typical gains of £4,406.
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This contrasts with England, where house prices fell by -1.1%%, and even more so Wales, where they dropped by -2.4%, or an average of £5,367.
Scotland – outside interest
Across the UK five of the top 20 regions with the highest house price growth were in Scotland: namely Clackmannanshire (8.9%), City of Dundee (8.2%), East Lothian (7.6%), Renfrewshire (6.6%), and Na h-Eileanan Siar (6.1%).
One reason Scottish prices are rising can be attributed to interest from outside the country, combined with limited supply. Bloomberg reported in September that US buyers are showing a growing clamour for Scottish property, especially townhouses in cities like Edinburgh.
Northern Ireland and the single market
Northern Ireland had two regions in the top 20 , as Derry and Strabane saw prices increase by 7.8%, while prices rose by 6.3% in Newry Mourne and Down.
The country is in a unique situation following Brexit, as it remains in the EU single market while being able to enjoy the benefits of distributing goods to the rest of the UK, arguably giving Northern Ireland businesses an advantage.
A mixed picture in England
Some English regions performed well, as Tandridge in Surrey saw prices soar by a significant 10.0% year-on-year. This was followed by Richmond upon Thames (9.7%) and Stratford-on-Avon (9.0%) .
Super Prime London seems to be losing some of its appeal however, as the City of Westminster saw prices drop by -13.9 % year-on-year, amounting to an eye-watering loss of £145,687 .
At the other end of the spectrum the more affordable Oadby and Wigston , saw a price drop of -8.6% .
A difficult year for Wales
In Wales house prices fell by -2.4% on average, suggesting more people are struggling with the effects of rising interest rates and inflation in the country. No regions in Wales made the top 20 in terms of UK house price growth.
The biggest house price fall in Wales was in Merthyr Tydfil , where they dropped by -11.6% , or £17,847 in cash terms.
Director of Benham and Reeves, Marc von Grundherr, said, “Scotland and Northern Ireland have outshone their English and Welsh counterparts this year, reflecting shifting demand across the UK.
“The appeal of Scotland’s rugged terrain and historic charm is attracting buyers from outside the country, while Northern Ireland’s new status as the only part of the UK in the EU single market arguably gives it an advantage.
“Fewer investors appear to be competing for London’s prime real estate, however, there are still some areas of the capital that are performing very strongly. So while alternative parts of the UK property market may have enjoyed their day in the sun during 2023, the London market has still held its own and remains popular amongst those looking to invest in bricks and mortar.”
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