UK Housing Market Fragments as North-South Price Gap Hits 10.3%

New analysis reveals accelerating landlord exodus and widening negotiation gaps as the UK property market enters 2026 with significant regional divergence.

LONDON, UNITED KINGDOM, December 30, 2025 /EINPresswire.com/ -- The UK housing market is experiencing its most significant regional divergence in years, with a 10.3 percentage-point gap now separating the strongest and weakest-performing regions, according to new analysis of official data published today by Best BMV Deals.

While the North East of England recorded annual house price growth of 5.0% and Northern Ireland saw gains of 7.9%, London prices fell by 2.4% in the year to October 2025. This marks the capital as the only central UK region in outright decline, reflecting a market that is fragmenting rather than collapsing.

Transaction Volumes Stable, But Buyer Demand Cools

Despite headline prices remaining broadly stable, with the UK average at £270,000 according to the latest UK House Price Index, transaction activity has shifted following the April 2025 stamp duty changes. HMRC data shows 98,450 seasonally adjusted residential transactions in October 2025, a modest 2% recovery from September but still 2% below October 2024 levels.

The RICS UK Residential Market Survey recorded buyer demand at -32% in November, its weakest reading since late 2023. This drop in demand has widened the negotiation gap, with agreed sale prices now averaging 3.5% to 4% below initial listing prices. In London and the South East, these discounts are reaching 6% or more as sellers adjust to post-threshold tax realities.

As price negotiations become more common, a growing share of these discounted transactions is occurring outside traditional estate agent listings. Investors are increasingly focusing on BMV properties for sale in the UK that arise from motivated sellers, off-market deals, or time-sensitive disposals, where pricing reflects execution certainty rather than headline valuations. This shift highlights how transaction conditions, rather than broad price movements, are shaping where genuine value is being found.

Record Landlord Exodus Reshaping Supply

A striking trend identified in the analysis is the accelerating exit of private landlords. Research from Savills indicates that in 2024, landlords sold 5.4 properties to owner-occupiers for every one they purchased, a record net outflow.

Estimates suggest approximately 93,000 buy-to-let landlords exited the market in 2025, spurred by the Renters' Rights Act, higher mortgage costs, and the increase in the stamp duty surcharge to 5%. The English Private Landlord Survey confirms this trajectory, with 31% of landlords planning to reduce their portfolios over the next 24 months.

Regional Performance Summary (Annual Growth to October 2025):

• North East England: +5.0% (Average price: £163,000)
• North West England: +3.1% (Average price: £214,000)
• South East England: +0.7% (Average price: £384,000)
• London: -2.4% (Average price: £547,000)

Outlook for 2026

The Bank of England's decision on December 18, 2025, to cut the base rate to 3.75% provides a glimmer of hope for affordability heading into the new year. However, transaction volumes are forecast to remain subdued at 1.18 million for 2026.

"The market is entering a phase where 'headline' prices matter less than 'achieved' prices," says the Best BMV Deals editorial team. "For buyers with finance in place, the current fragmentation provides the most significant negotiated property discounts seen in years, particularly in the South, where stock levels have risen to 15%."

Notes:

The complete UK Housing Market 2025 Analysis is available at BestBMVDeals.co.uk

Data sources include: UK House Price Index (HM Land Registry), HMRC Monthly Property Transactions, Nationwide House Price Index, and Halifax House Price Index.

Index, Zoopla House Price Index, RICS UK Residential Market Survey, English Private Landlord Survey, and Savills research.

About BestBMVDeals.co.uk

BestBMVDeals.co.uk is a UK property sourcing platform that connects investors with below market value and discounted property opportunities. The platform publishes regular market analysis and research to support informed property investment decisions.

Thomas Kaspersky
Renomark Limited
email us here

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.