The South East's 2.1% Decline

The South East region has taken the top spot in the UK's house price decline list, with a 2.1% drop in home values over the past year, according to Halifax data.

The average property in the South East is now worth £382,704, a decline from £390,000 in the previous year.

This marks the first time the South East has overtaken London in terms of house price decline.

London, by contrast, recorded a smaller drop of 1.5%, leaving the capital's average home at £534,375.

The South East's decline is attributed to an oversupply of homes and a shortage of serious buyers, according to property market commentators.

Jonathan Hopper,chief executive of Garrington Property Finders, notes that the region has too many properties on the market and not enough demand, pushing prices down.

The imbalance is less pronounced in northern England and Scotland, which explains the price gains seen in these regions .

A Northern Price Surge

The North East and Scotland have recorded significant price gains ,with the average house price increasing by 3 .8% to £222,650 in Scotland and 3.1% to £181,703 in the North East.

The North West also saw a 3% gain, taking the typical home there to £248 ,304.

Experts attribute the price surge in the North to a lack of oversupply and a storng demand for homes .

Halifax's head of mortgages, Amanda Bryden, explains that the current softness in the market is largely driven by uncertainty linked to recent events in the Middle East.

Even though mortgage rates have been cut recently, expectations of higher inflation have kept borrowing costs above the levels seen at the start of the year, squeezing affordability for many potential buyers and dampening demand .

The Broader Market Picture

The UK property market is essentially flat when looking at the whole of England, Wales, and Scotland together.

The average UK property fell 0.1% in May, matching the same dip that was recorded in April and following a further drop in March.

This marks the first three-month string of declines since early 2023.

The typical British home is now valued at £298,806, barely different from the £299,251 figure recorded a month earlier.

Over the longer term, the price is only about £1,500 higher than a year ago, up from £297,322 in May 2025.

Open Questions

What impact will the ongoing conflict in the Middle East have on the UK property market?

Will the North's price surge continue, or will it slow down in the coming months?

How will the Bank of England's interest rate decisions affect the property market in the UK?