Manchester Overtakes London as Fastest-Growing UK Housing Market with 71% Price Surge
Greater Manchester has emerged as the UK’s new housing hotspot, overtaking London for the fastest house price growth in real terms over the past two decades. New analysis from estate agent Savills reveals that two constituencies – Blackley and Middleton South – have recorded staggering inflation-adjusted growth of 71% since 2005, with average property values now approaching £219,000.
The Savills report highlights that, nationwide, nominal house prices have nearly doubled over the last 20 years, climbing by 95%. However, when adjusted for inflation, the real increase drops to under 9%, reflecting ongoing economic pressures such as wage stagnation, which continue to limit buyer affordability.
While London historically dominated UK house price growth, its market has cooled significantly in recent years. Prime areas like Kensington and Bayswater have still seen 67% real growth since 2005, yet 44 of the city’s 75 parliamentary constituencies have experienced inflation-adjusted falls over the last decade. Shifts in buyer preferences, rising living costs, and demand for more space have further tempered growth in the capital.
Lucian Cook, Head of Residential Research at Savills, explains the shift:
“Areas that experienced the strongest real house price growth historically were London locations, which saw robust increases until 2015. Growth in these areas has now reached an affordability ceiling, as average incomes have struggled to keep pace. Blackley and Middleton South, by contrast, were initially underperforming, positioning them perfectly to benefit from Manchester’s urban resurgence and the next phase of the UK housing market cycle.”
Other northern hotspots include Gorton and Denton, which have seen 49% inflation-adjusted growth, with average property values around £234,000. Factors such as urban regeneration, comparatively lower house prices, and lifestyle appeal are driving buyers north, marking a notable regional housing shift from London to northern cities.
The disparities across the UK housing market are stark. Many regions, including parts of the North East, Yorkshire and The Humber, Wales, and Scotland, have seen stagnant or declining property values after accounting for inflation. Areas like Blackpool South experienced a 25% real-term drop, while Aberdeen South recorded an 18% decline, reflecting local economic challenges such as oil sector downturns.
Looking ahead, Savills forecasts continued strong growth across northern England, Wales, and Scotland. Regions including the North West, North East, Yorkshire and The Humber, and key urban centres are expected to see price rises exceeding 27% over the next five years. In contrast, London and the South East are projected to experience more modest growth, with under 20% increases by 2030. Notably, house prices in the North West are expected to narrow the gap with the UK average from nearly 30% in 2020 to around 15% by 2030.
This shift underscores a major trend in the UK housing market, as affordability pressures, regional regeneration, and changing buyer priorities reshape property demand and growth patterns across the country.
