The Regions Where House Prices Are Actually Falling in 2026

The story of 2026’s property market is not a single national trend. It is a tale of two countries. In London and much of the South, prices are flat or falling. In the North West, Northern Ireland and Scotland, buyers are being outbid.

This matters for three reasons. First, it changes your negotiating position. Second, it signals where demand is strongest. Third, it shows what happens when a region prices itself beyond what local incomes can support.

Where are house prices falling and rising in 2026?

This table draws on the UK House Price Index (January 2026, GOV.UK), Zoopla House Price Index (March 2026), and Nationwide (Q1 2026). Where sources differ slightly, the most recent or most widely cited figure is used.

Why are prices falling in the South?

London and the South East did not fall because of weakness. They fell because they are too expensive. The average London property costs £554,000 (UK HPI, January 2026). The ONS housing affordability data for 2025 puts London’s price-to-earnings ratio at 10.6x. That means the average London home costs 10.6 times the median full-time salary. For context, an area is generally considered affordable if the ratio is at or below 5x.

The South East is one of the least affordable places in England outside London. Half of its local authorities have a price-to-earnings ratio above 10x (ONS, 2025). Surveyors and agents report that buyers in the region are becoming increasingly price-sensitive. When demand softens, prices stall or fall.

How did the stamp duty change make things worse?

From 1 April 2025, the first-time buyer stamp duty threshold dropped from £425,000 to £300,000 (GOV.UK). The maximum purchase price for first-time buyer relief also fell from £625,000 to £500,000. In London and the South East, where average prices sit well above £300,000, thousands of buyers now pay stamp duty who would have been exempt before.

Where is the money moving instead?

The North West’s 3.3% growth was the strongest in Great Britain in the year to March 2026 (Zoopla). Yorkshire and the Humber saw 3.0% growth in the year to January 2026 (UK HPI). The reason? Affordability. A £250,000 budget gets you a three-bed semi in Manchester or Liverpool. In London, it barely covers a studio flat.

The shift is real. Remote work, cost of living pressures, and affordability mean buyers are moving north and west. The ONS reports that London continues to have high levels of net outward internal migration. Rising prices in more affordable regions are the symptom, not the cause.

What are the forecasters saying for the rest of 2026?

The major property forecasters broadly agree on the direction, if not the exact numbers.

The consensus is that southern markets will stabilise rather than fall sharply further. Once prices align more closely with local incomes, demand stops evaporating. But do not expect a bounce. Savills forecasts cumulative UK growth of 17% between 2025 and 2029, with London significantly underperforming at around 8% total.

What does this mean if you are buying right now?

If you are buying in London or the South East, you have leverage. Prices are flat or falling, asking prices are often overstated, and sellers are more motivated than they were a year ago. A condition assessment carries more weight when the market is soft.

If you are buying in the North West or Midlands, you are competing. Prices are rising because supply is tight and demand is high. You need to move fast, bid confidently, and be ready to proceed. A prompt condition assessment and clear evidence of your financial position matter more in a competitive market.

---

Frequently asked questions