Why the shrinking North-South UK property divide is good for investors
- Tailor My Property
- 3 days ago
- 3 min read

Recent house price data shows that growth in the Northern regions of the UK has started to catch up with the historically stronger South, closing the gap on more expensive areas that seem to be reaching a period of plateau.
According to the UK House Price Index’s latest data, prices rose by 8% in the North West and 7.9% in the North East in the year to February, while month-on-month they recorded increases of 0.7% and 0.4% respectively, bringing average prices to £211,977 in the North West and £160,452 in the North East. In contrast London prices increased by just 1.7% annually leading to an average price of £555,625 in the capital.
Below we explore what is causing the gap to close.
Northern cities offer great investment returns
Popular Northern cities like Manchester, Liverpool and Leeds have recently seen significant investment in infrastructure, culture, and technology, making the North a hub for higher education and business interests like media agencies, tech startups and financial services, attracting young talent and increasing housing demand from locals and internationals alike.
These cities now offer a winning combination of lower house prices and higher rental yields compared to the South, making them popular with investors and landlords.
Higher rental yields
As an example of why the North appeals to buy-to-let investors, rents in the North East are cheaper than anywhere else in the country at around £695, while costing only around £109,072 to purchase on average. This gives the region the highest average rental yield in the UK of 7.65%.
Meanwhile London offers the lowest gross yields in the UK at 4.93% on average, only 0.1% higher than three months ago.
Major transport projects in the North
Major infrastructure developments in the North promise a more connected and easy-to-access lifestyle. New transport opportunities like the HS2 and the Northern Powerhouse Rail (NPR) aim to open up London and other Southern towns for workers and semi-digital nomads who can enjoy lower prices and better quality of life in the North while still being able to commute with convenience.
Slowing house price growth in the South
On the other end of the index London and much of the South East have experienced slowing growth, largely because they already had significantly higher property prices.
With many Southern areas proving less affordable for buyers historically, especially those who are first-timers, and with price-to-earnings ratios in London being among the worst in Europe, many people have chosen to migrate further North when it comes to both buying and renting.
With higher mortgage rates, new regulations and low house price growth in recent years, rents in the South also appear to have reached an affordability ceiling and tenant demand is starting to dissipate.
As a result Southern towns are now showing flat or negative price growth, especially in commuter belt areas that used to rely heavily on London-centric jobs.
Property is still a strong investment in 2025
With US president Donald Trump’s tariffs currently reshaping the financial landscape and stocks and shares investments taking a considerable knock, the UK property market is proving to be a safer and more stable investment option.
UK house prices rose by 5.4% year-on-year in February 2025, indicating that the market is still seeing stable growth, and there are expectations that the Bank of England may soon need to cut interest rates which will lead to falling mortgage rates, making now a good time to explore potential property investments.
With several key factors currently influencing the UK property market it’s important to consult a professional before pursuing your next investment. Tailor my Property has a professional network of property, finance and investment professionals who can assist with strategies suited to your individual portfolio requirements.
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