The UK property market has been stuck in neutral for much of 2025 but next year brings a genuine shift.
The latest forecast shows house prices will grow by 2% across the country in 2026, which is around an average increase of £7,200 per property.
But the regional picture tells a very different story. The North and Wales will see proper growth while London and the South will remain subdued. But there are five regions that will capture the lion’s share of 2026’s gains.
The smart money isn’t chasing London. The South is already overpriced relative to what people earn there. Interest rates are set to drop further, which means affordability in the cheaper regions will improve, and that’s where buyers will move.
The five regions I’m watching all have two things in common: prices people can actually afford and jobs that justify those prices.
NORTH WEST
Manchester is being rebuilt right now and it’s hard to overstate what that means for the region. Victoria North is a £4 billion masterplan with 15,000 homes coming through. For the average property at current North West prices, you’re looking at roughly over £10,000 appreciation in a single year.
The rental backdrop makes this region stand out from everything else – postcodes like M14 are yielding 9%.
You don’t see that kind of return anywhere in the South anymore. Over five years, the North West is forecast to hit 31.2% cumulative growth. It’s the strongest performer by a considerable margin.
Greater Manchester has already climbed significantly over the past decade, and that momentum is going to accelerate next year because affordability is finally meeting serious economic activity.
NORTH EAST and YORKSHIRE AND THE HUMBER
Leeds is the driver here and it’s worth understanding why. The Innovation Arc is putting serious money into the regional economy with actual job creation attached.
Both Yorkshire and the Humber are forecasted at 4.5% for 2026, which puts it in the top tier of performing regions.
Over five years, it’s hitting over 28% cumulative growth, which mirrors what Wales is doing but it’s grounded in economic fundamentals that are happening right now. You can see the cranes, you can see the investment, you can see the jobs being created.
Newcastle’s where the real action is in the North East and the city is genuinely attracting investment that sticks around. Investment, jobs, migration building year on year.
The region will see a 4.5% increase in 2026, with a 26.4% cumulative growth forecast over five years. It’s the modest performer of the five, but modest up here still means delivering growth that makes the South look static.
People are moving to Newcastle because they can afford a better quality of life and the jobs are there to support it.”
WALES and SCOTLAND
People are moving to Wales and Scotland in genuine numbers because the prices make sense and there’s actually life there. Cities like Cardiff and Swansea are rapidly regenerating while Edinburgh and Glasgow continue to pull serious inward migration from the South because people can afford to buy and they want to live there.
These cities have young populations, universities that attract talent, decent employment across different sectors.
That 3% growth in 2026 might not sound like much until you do the math. Wales will see roughly £10,000 appreciation per property in that single year. And both regions will hit around 28 to 29% cumulative growth over five years, which is substantial sustained growth.
Now compare that to London and the South East, which show zero growth in 2026. These northern regions will more than double that performance, and the gap will only widen from there.
THE REASON FOR THE SURGE
The North West sits 30% below the UK average right now. By 2030, that gap narrows to 15%. That’s prices catching up because demand justifies it, not because London’s getting cheaper. London’s 70% above the UK average and will still be 33% above in 2030.
Right now, the North and Wales look well placed to handle anything the market throws at them, and starting in 2026, that position can only be expected to grow stronger.
It should be noted however, that although it looks like there’s little room left for London’s prices to rise further, the property market remains unpredictable.