The Ultimate 2021 Guide to UK House Prices

The Ultimate Guide to UK House Prices 

House prices are a huge element of any property buyer’s journey. Whether you’re purchasing a property for personal or investment purposes, you’ll want to know about the latest UK house price trends.

To get a full and detailed understanding of UK house prices, how they’ve changed over the years, and how they’re predicted to change, it’s essential to read as much information as possible about property prices in the UK.

If you’re interested in learning more about UK house price trends, the current state of the UK property market, and predictions on future property price changes, you’ll find all of this in our ultimate guide to UK house prices.

Here, we look at trends within regional house prices and explore why house prices in North West cities are rising so quickly.

We’ll also discuss the effect of Covid-19 and the Brexit vote on average house prices and analyse house prices over the last 5 years and beyond with our UK house prices graph.

Keep reading to find out more.

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Past Property Market Trends

The UK property market has changed massively throughout the years, especially in regards to property prices.

So how have UK house prices changed? How much do house prices rise in different cities across the UK? Which particular regions have seen the strongest growth? And what effect did Brexit and Covid-19 have on property price fluctuations?

 

How Much Have UK House Prices Changed Over the Last 5-10 Years? 

In the UK, house prices over the last 5 years and 10 years have seen significant growth.

When analysing data from the Land Registry UK House Price Index, it’s clear that the average UK house price has seen massive growth over the last 10 years.

In January 2011 property prices in the UK stood at £167,300 on average, compared to average property prices in the UK of £249,309 by January 2021.

This means that over 10 years, UK house prices have increased by 49% on average, which is an impressive rate of growth.

When you look at house prices over the last 5 years using the same data, UK house price growth stood at an increase of 21.3% between January 2016 and January 2021.

Growth With Regional House Prices

While UK house price growth has been significant across the country as a whole, there has been a more noticeable increase in certain parts of the UK.

House price increases by area vary massively, and UK house prices over the last 5 years and beyond have seen higher growth in certain areas.

So what trends have we seen in the growth of regional house prices?

For those who feel clued up on the best areas to invest in the UK, and recognise house prices in the North West as some of the best in the UK as of 2021, it may come as a surprise that regions in the South have proven to have higher rates of property price growth when looking at house price data over a 10-year period.

Between January 2011 and January 2021, London saw a whopping 74.1% increase in average house prices, followed by the East of England’s property price growth of 63.9%, the South East’s property price growth of 57.9%, and the East Midland’s growth of 53.9%.

When comparing regional house prices over 10 years, the North East is the worst performing area in England with an increase of just 17.9%.

Likewise, Northern Ireland’s growth rate stood at only 24%.

It wasn’t until 2015/2016 that we saw a shift in the growth of regional house prices, with North West house prices outperforming that of London with a growth of 28.7% between January 2016 and January 2021.

Between 2018 and 2021, house price increases by area highlighted the strength of North West house prices compared to Southern regions.

Within these three years, house prices in the North West increased by 18.4%, according to the House Price Index data, while London property prices saw growth of just 4.5%.

The South East saw a similarly low growth of only 6.7%.

Overall, UK property price growth during this period came to 11%, which shows that house prices in the North West of the UK exceeded the national average.

UK House Prices Graph

Use this UK property prices graph to see rates of UK house price inflation by area/house price yearly increase and decrease data.

This data on regional house prices was taken from Land Registry’s UK House Price Index.

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How Did the Brexit Vote Affect UK House Prices?

Over the last 10 years, Brexit has had one of the biggest influences on the UK property market and UK house prices.

In the lead up to the 2016 EU referendum, many people, particularly investors, were fearful of Brexit’s effect on property prices in the UK.

While property prices did fall due to this uncertainty, the market wasn’t affected as dramatically as many expected.

According to Halifax, UK house prices fell by 1% in July 2016 – a month after the EU referendum vote.

By October of that same year, however, property prices in the UK had increased by £2,623.

Between October 2016 to October 2017, there was a reported UK house price growth of 4.5%.

Now, the UK has officially left the EU and house prices have remained fairly consistent.

Between December 2020 and January 2021, there was a slight dip in the UK average house price, dropping from £251,500 to £249,309.

However, with new predictions from Savills estimating that UK house prices will increase by 4% in 2021, it’s likely there will be little impact on property by Brexit.

UK House Prices in 2020 

The year 2020 was a pivotal year for the UK housing market, and UK house prices fluctuated throughout each quarter.

It’s safe to say that despite the Covid-19 pandemic, average UK house prices have continued to rise, particularly in certain parts of the country.

During the beginning of 2020, average asking prices for UK property had increased by 2.3% since 12th December, following Boris Johnson’s election victory.

According to Rightmove, this growth added around £6,785 to the value of average UK house prices.

Fast forward to December 2020, and UK house prices hit a new record at £253,374, according to Halifax.

Liverpool aerial image Liverpool aerial image

Current UK House Prices By Postcode

So how have UK house prices in 2020 varied according to different areas and postcodes?

Based on the latest UK House Price Index data, the average UK house price is currently £249,309.

This is a high price to pay for many, especially for investors looking to get the most out of rental returns from their investment.

Fortunately, the UK average house price is not representative of a lot of regional house prices.

Regions in the North, especially the North West, boast lower average property prices paired with strong house price growth rates.

North West house prices currently have an average value of £184,234, according to Land Registry data, with cities like Liverpool offering some of the lowest house prices in the UK.

Here is a comparison of some current UK house prices by region, looking at some of the most and least affordable UK house prices by postcode.

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L1 – Liverpool 

Considered one of the most affordable places to buy property in the UK, a number of Liverpool postcodes boast some low average property prices when it comes to house prices in North West cities.

L1, spanning a large portion of the city centre, boasts an average property price of £123,488, according to Zoopla.

The low price tag of L1 Liverpool properties is part of the reason behind the area’s strong rental yields, with L1 offering potential yields up to 10% and taking the top spot of Totally Money’s buy to let area guide.

The average yield is slightly lower than this peak, but still incredible at 7.6%.

If you’re looking to keep costs low with your investment and seeking the most affordable UK house prices by postcode, Liverpool’s L1 postcode is not to be missed.

 

Media City at night Media City at night

W11 – London

When it comes to affordable UK house prices, London is not a city that immediately springs to mind for most people.

The English capital is notoriously known for having some of the most expensive property prices in the UK, which is why so many investors are choosing to seek opportunities in more affordable cities.

Spanning the famous Notting Hill area, W11 in London is home to some of the market’s priciest properties.

Despite the worldwide recognition that comes with Notting Hill and its reputation as a trendy London hotspot, with an average house price of £2,199,924, investors will struggle to make much of a return on investment in this area, with rental yields of just 2.1%

 

M50 – Manchester 

Manchester is home to many affordable postcodes in the UK.

One of the most popular areas for investment is Salford Quays due to the presence of MediaCityUK – a large scale regeneration project and business destination.

The M50 postcode in Salford Quays offers some affordable property prices, with an average of £221,168.

While pricier than Liverpool’s L1 postcode, this area provides a lot of potential for strong yields due to high rental costs.

Capital growth is also strong in the area thanks to MediaCityUK, which is continually redeveloping into one of the country’s most exciting destinations.

Birmingham city centre Birmingham city centre

SL5 – East Berkshire 

In the South East of England is Berkshire – a quaint English county filled with plenty of countryside attractions.

Here, the difference between regional house prices is apparent.

Berkshire’s SL5 postcode covers the Ascot area and comes with an average property price of £1,139,819.

This shows the divide between the North and the South when it comes to UK property values by postcode and highlights the fact that London is not the only Southern location with extravagant price tags.

 

B1 – Birmingham 

The B1 postcode of Birmingham spans the Birmingham city centre area and offers an average property price of £255,945.

While this is higher than the average prices in Manchester and Liverpool’s postcodes, it’s still pretty low, considering the West Midlands has typically higher prices than the North.

Birmingham has a lot to offer in terms of property investment, but the average yields of 3.9% fall short of those available in the North West.

The North is currently performing incredibly highly in house price growth. In particular, the North West has seen some of the strongest price growth when looking at the latest UK house price trends.

Amy Jackson, RWinvest

An empty street during lockdown An empty street during lockdown

The Effect of Covid-19 on UK House Prices

While things looked plain sailing for the UK property market and the economy during the end of 2019 and the beginning of 2020, by mid-March, the UK economy suffered a sudden shock to the system.

The Covid-19 pandemic meant that UK businesses shut down, many people were made redundant, and a lot of people were left questioning– is now a good time to invest?

This unexpected strain on the economy led many to believe that the UK property market was drastically set to dip.

However, while UK house prices have inevitably seen some decline near the beginning of the pandemic, property prices in the United Kingdom have experienced significant growth throughout the year.

In August, annual property prices in the UK grew by 3.7%, which was the largest year-on-year growth since 2015.

By November, UK house prices had increased 6.5% higher than they were in the previous year, presenting the UK’s most considerable rise in property prices in almost six years.

Now, in early 2021, house prices are 7.5% higher year-on-year.

Manchester and Salford aerial view Manchester and Salford aerial view

When looking at past periods of uncertainty within the UK economy and property market, evidence shows that property prices always recover.

Those who understood this and invested despite Covid-19 uncertainty were able to buy property at a lower price than usual due to the range of deals and discounts available, while taking advantage of heightened capital growth further down the line.

The stamp duty holiday, announced in July, has also allowed investors to save large amounts in stamp duty tax.

This tax break lasts until June 2021, so investors still have time to make tax savings by investing in the coming months.

 

UK Property Price Predictions

Even though the coronavirus pandemic is not yet over, many optimistic UK property price predictions are in store for the future market and UK house prices.

According to the latest Savills predictions, the UK will see average property price growth of 21.1% by 2025.

While this is an attractive figure, house price increases by area suggest that certain regions will outperform the national average, with the North West continuing to lead the way for regional house prices.

Liverpool aerial view of city centre in sunny weather Liverpool aerial view of city centre in sunny weather

Out of all UK regions, those in the North tend to perform highly in house price growth.

The North West, in particular, has seen some of the strongest property price growth when analysing UK house price trends.

The latest property price news for the UK and North West housing news suggests this growth is set to continue.

By 2025, Savills predicts that the North West region will see house price growth of 28.8%, followed by 28.2% in Yorkshire & The Humber, and 24.0% in the West Midlands and East Midlands.

In the same report, the lowest-performing regions are London with 12.6% growth and the East and South East of England with a house price increase of 17.0%.

It’s clear that areas down South are bringing down the national average growth predictions for the UK.

To maximise capital growth potential over the coming years, looking for opportunities up North is essential.

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FAQ's About UK House Prices

Want to find out more about UK house prices?

Here are some answers to commonly asked questions about the UK housing market, including property price predictions, the impact of lockdown on house prices, and more.

The significance of North West house prices towards UK property market growth as a whole may have left many wondering why house prices in the North West of the UK present more substantial growth than other regions.

Several factors have contributed to the North West housing market’s strength in the UK, all of which are essential for investors to know about when comparing regional house prices.

The North West region is home to two major UK cities, Liverpool and Manchester.

Both these cities are known for their vibrant culture, famous student scenes, and thriving economy.

More recently, these two UK cities have made a name for themselves as property investment hotspots thanks to growing North West house prices and high rental yields.

One of the most significant contributing factors to North West house price growth is regeneration, with both Liverpool and Manchester seeing extensive city-wide regeneration schemes over recent years.

Projects such as MediaCityUK in Manchester and LiverpoolONE in Liverpool have injected billions worth of investment and redevelopment into the North West and attracted plenty of worldwide interest.

With plenty of schemes planned for the future, including the eagerly awaited Liverpool Waters project, it’s clear that the North West is gaining some much-deserved attention.

As a result of regeneration improving the appeal of these cities, house prices have surged due to increased property market interest.

Investors who may have once jumped at the chance of a London investment are realising that there’s greater potential to be had up North, paired with much lower prices and more substantial returns.

In comparison, London is seeing less property market interest due to unaffordable prices and low yields, which is only boosting the regional house prices of the North West further.

More young professionals are viewing Liverpool and Manchester as top cities to live and work in.

Higher numbers of people are choosing to move to the North West, leading to an increase in demand, which is undoubtedly contributing to the price changes in this UK region.

In the year to June 2017, 330,000 people left the confines of the capital, and in 2018, record numbers of Londoners had been selling their existing properties to move up North.

One of the biggest markets when it comes to UK property investment is the student housing market.

Home to some world-class universities such as the University of Liverpool and the University of Manchester, the North West attracts vast numbers of students each year, boosting demand for student accommodation.

With student accommodation often more affordable than residential property types, investors can purchase a student property for as low as £59,995 with Liverpool’s City Point development.

Understanding and researching UK house prices and property market predictions is an integral part of any investment journey.

This is because without knowing about the past, current, and future state of the area you’re looking to invest in, you get no indication of possible capital growth returns.

Capital growth is one of the most lucrative elements of a buy to let investment.

If your property grows in value over time, you will have built up two types of returns – rental returns and capital gain.

By the time you come to sell your property, its value could have increased in line with local property market trends.

This means you will benefit from a large lump sum of money on top of the money you’ve earned through rental income.

By identifying the best house price increases by area, you can narrow down the locations with the best investment opportunities before making your purchase.

You can then avoid any cities or regions with slow expected growth.

Following a sharp rise in coronavirus cases, the UK entered its third nationwide lockdown, set to last until mid-February.

Whether you’re a first-time buyer, a homeowner looking to move, or an investor looking to purchase a buy to let property, it’s natural to feel uncertain about whether you should buy property during this time.

The critical thing to keep in mind is that the property market is still fully open.

Buyers have the choice of attending either in-person viewings (provided all guidelines are adhered to) or taking part in virtual viewings, which were prominent during the first lockdown in 2020.

Investors still have until June 2021 to take advantage of the stamp duty holiday, while there is an increasing number of lucrative investment opportunities hitting the market.

Our latest property, ELEMENT – The Quarter, is a prime example of this.

This development is the first eco-friendly property in Liverpool, and offers rental yields of 8% assured for one year.

This development is anticipated to generate high levels of tenant interest, and with prices from just £74,950, investors will want to act fast to secure the best deals.

If you want to learn more about the impact Coronavirus has had on house prices, or if you wish to find out about the rental market post Covid-19, be sure to read our latest blog on the topic.

If past UK house price trends are anything to go by, it’s evident that despite market uncertainty for 2021 as the Covid-19 pandemic continues, UK house prices are expected to rise to new levels in the coming years.

Bricks and Mortar is one of the strongest assets to invest in due to the property market’s resilience, which is why savvy investors are continuing to purchase buy to let property.

By investing right now, investors can take advantage of some of the biggest ever discounts, with the chance to make an investment at below-market value and benefit from even higher capital growth in the future.

Why Have North West House Prices Outperformed London in the Last 5 Years?

The significance of North West house prices towards UK property market growth as a whole may have left many wondering why house prices in the North West of the UK present more substantial growth than other regions.

Several factors have contributed to the North West housing market’s strength in the UK, all of which are essential for investors to know about when comparing regional house prices.

The North West region is home to two major UK cities, Liverpool and Manchester.

Both these cities are known for their vibrant culture, famous student scenes, and thriving economy.

More recently, these two UK cities have made a name for themselves as property investment hotspots thanks to growing North West house prices and high rental yields.

One of the most significant contributing factors to North West house price growth is regeneration, with both Liverpool and Manchester seeing extensive city-wide regeneration schemes over recent years.

Projects such as MediaCityUK in Manchester and LiverpoolONE in Liverpool have injected billions worth of investment and redevelopment into the North West and attracted plenty of worldwide interest.

With plenty of schemes planned for the future, including the eagerly awaited Liverpool Waters project, it’s clear that the North West is gaining some much-deserved attention.

As a result of regeneration improving the appeal of these cities, house prices have surged due to increased property market interest.

Investors who may have once jumped at the chance of a London investment are realising that there’s greater potential to be had up North, paired with much lower prices and more substantial returns.

In comparison, London is seeing less property market interest due to unaffordable prices and low yields, which is only boosting the regional house prices of the North West further.

More young professionals are viewing Liverpool and Manchester as top cities to live and work in.

Higher numbers of people are choosing to move to the North West, leading to an increase in demand, which is undoubtedly contributing to the price changes in this UK region.

In the year to June 2017, 330,000 people left the confines of the capital, and in 2018, record numbers of Londoners had been selling their existing properties to move up North.

One of the biggest markets when it comes to UK property investment is the student housing market.

Home to some world-class universities such as the University of Liverpool and the University of Manchester, the North West attracts vast numbers of students each year, boosting demand for student accommodation.

With student accommodation often more affordable than residential property types, investors can purchase a student property for as low as £59,995 with Liverpool’s City Point development.

How Important Are House Price Growth Predictions for Investors?

Understanding and researching UK house prices and property market predictions is an integral part of any investment journey.

This is because without knowing about the past, current, and future state of the area you’re looking to invest in, you get no indication of possible capital growth returns.

Capital growth is one of the most lucrative elements of a buy to let investment.

If your property grows in value over time, you will have built up two types of returns – rental returns and capital gain.

By the time you come to sell your property, its value could have increased in line with local property market trends.

This means you will benefit from a large lump sum of money on top of the money you’ve earned through rental income.

By identifying the best house price increases by area, you can narrow down the locations with the best investment opportunities before making your purchase.

You can then avoid any cities or regions with slow expected growth.

What Will Happen to House Prices in the 2021 UK Lockdown?

Following a sharp rise in coronavirus cases, the UK entered its third nationwide lockdown, set to last until mid-February.

Whether you’re a first-time buyer, a homeowner looking to move, or an investor looking to purchase a buy to let property, it’s natural to feel uncertain about whether you should buy property during this time.

The critical thing to keep in mind is that the property market is still fully open.

Buyers have the choice of attending either in-person viewings (provided all guidelines are adhered to) or taking part in virtual viewings, which were prominent during the first lockdown in 2020.

Investors still have until June 2021 to take advantage of the stamp duty holiday, while there is an increasing number of lucrative investment opportunities hitting the market.

Our latest property, ELEMENT – The Quarter, is a prime example of this.

This development is the first eco-friendly property in Liverpool, and offers rental yields of 8% assured for one year.

This development is anticipated to generate high levels of tenant interest, and with prices from just £74,950, investors will want to act fast to secure the best deals.

If you want to learn more about the impact Coronavirus has had on house prices, or if you wish to find out about the rental market post Covid-19, be sure to read our latest blog on the topic.

Will UK House Prices Rise Again?

If past UK house price trends are anything to go by, it’s evident that despite market uncertainty for 2021 as the Covid-19 pandemic continues, UK house prices are expected to rise to new levels in the coming years.

Bricks and Mortar is one of the strongest assets to invest in due to the property market’s resilience, which is why savvy investors are continuing to purchase buy to let property.

By investing right now, investors can take advantage of some of the biggest ever discounts, with the chance to make an investment at below-market value and benefit from even higher capital growth in the future.

Are You Ready to Invest in the UK Property Market?

Whether you’re an overseas property investor or an investor based in the UK, if you’re ready to purchase student or residential property, get in touch with RWinvest.

We have a range of fantastic investment opportunities to choose from in top North West postcodes, offering yields of up to 8%.

Contact us today, and one of our knowledgeable property consultants will be able to advise you on our current opportunities and talk you through your available options.

For more UK and North West housing news, head to the buy to let news section of our website.

Disclaimer:

The content in this guide was last updated in March 2021. Statistics on UK house prices have been found via various sources, including Land Registry’s House Price Index, Zoopla, and Halifax. The percentages used in our UK property prices graph were calculated using house price statistics from the Land Registry House Price Index.

3 Units Remaining

The Summit

Stylish Baltic Triangle Living

Liverpool Prices from £139,950

Assured 7% NET Rental Yields

15-20% Below Market Value

Invest From £35,000

ELEMENT - The Quarter

North West's First Eco-Development

Liverpool Prices from £74,950

8% NET Rental Return

300m Away From New £1bn Royal Hospital

10% Deposit

Off Market Manchester Apartments

Premium Residential Investment

Manchester Prices from £219,112

5.5% NET Rental Return

10% Deposit Required

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