North vs London: Where Property Returns Are Truly Growing

Good morning,

London is officially in the red, while the North East is booming. Report from the latest ONS report.

House prices, rental growth, yields, London is slowing across the board, and the North East is accelerating faster than most forecasts predicted. Imagine turning £300k into an extra £172k just by choosing the right region.

Don’t wait for the market to catch up, let’s dive into the full report and see what the data is telling us.

Let’s dive in.

In this newsletter, you'll find...

• This Week’s Biggest News…….

• North vs London: Where Property Returns Are Truly Growing

• Property Listings

• Bottom Line

• What's Next?

This Week’s Biggest News…….

1. Buyer & Tenant Demand Still Rising Despite Budget Fears - While headlines scream "market frozen," actual data shows buyer and tenant demand continued to climb in September 2025

2. £500k Property Tax Threshold: 59% of London Listings Would Be Hit

North vs London: Where Property Returns Are Truly Growing

We’ve been talking for months and looking at the property markets in London and the North. Both are moving in completely different directions.

Its not looking to great for properties in London’s, whilst the North is accelerating. And this week, it finally stopped being speculation, it’s official.

Growth That Creates Excitement

The Office for National Statistics just released their August 2025 house price data, and the numbers are stark.

London is down -0.3% year-on-year, while the North East is up a whopping +6.6%. If you’ve been on the fence about where to invest, the data just made the decision for you.

London is the only region in negative growth. This also validates what Savills forecasted last week (from our report), they predicted the North East would outperform London by 15.2 percentage points by 2030.

Government data now shows we’ve already got a 6.9-point spread in a single year. At this pace, Savills’ five-year prediction is essentially happening in just over two years.

So why is this happening?

It comes down to affordability. A North East property at £164,000 growing at 6.6% adds about £10,800 a year in value.

Even after that growth, it’s still accessible for local buyers. London, on the other hand, sits at £566,000 on average. Every percentage of growth pushes prices further out of reach for most locals.

Limited supply plus high prices equals stagnation, whereas the North has ample supply at lower prices, which fuels growth.

But here’s where it gets even more interesting: rents.

September 2025 rental data shows London’s rent growth slowing for the tenth month in a row, down to 5.3%, while the North East leads England at +9.1%. Let’s break it down:

North East:

• House price growth: +6.6%

• Rental growth: +9.1%

• Average property: £164,000

• Gross yield: ~9%

London:

• House price growth: -0.3%

• Rental growth: +5.3% (slowing)

• Average property: £566,000

• Gross yield: ~4.45%

One market is accelerating. One is decelerating. That’s clear.

Now, let’s put this into a practical scenario. Imagine you have £300,000 to invest today. What would happen if you invested in each market?

North East:

• Capital growth over five years at 6.6%: +£100,000

• Rental income over five years at 9%: +£135,000

• Total return: £235,000

London:

• Capital growth over five years at -0.3%: -£4,500

• Rental income over five years at 4.45%: +£66,750

• Total return: £62,250

That’s a difference of £172,750 just by choosing the right location. That’s enough to put a deposit on another property in the North East. Geography alone is giving you a huge edge.

This week just confirms everything we’ve been showing. Over the past three weeks, we’ve seen:

1. Renters’ Rights Act plus 150,000 landlords exiting.

2. Savills forecasting 28.8% North vs 13.6% London by 2030.

3. Official government data proving it’s happening right now.

The North is where the returns are being made.

Property Listing

Bottom Line

The property market divergence isn’t just a prediction anymore, it’s happening right now. For anyone thinking about investing, this is a real opportunity to maximise your returns.

London is stagnating, with negative growth, slowing rents, and lower yields, while the North East is surging, delivering strong house price growth, rising rents, and high yields. It’s hard to ignore.

For investors, the message is clear: location matters, and at the moment, the North is where the best returns are being made.

What’s Next?

Now that the data is clear, the next step is thinking strategically. For investors, this means:

1. Reassessing your portfolio – Are your current investments in slow-growth areas like London, or are you positioned in accelerating markets like the North East?

2. Exploring opportunities in high-growth regions – With house prices and rents rising in the North East, it’s worth identifying properties that can deliver strong yields and capital growth.

3. Tracking rental trends – Keep an eye on rental growth as a key indicator of market momentum. The North’s rents are accelerating, while London’s are slowing—this impacts cash flow and long-term returns.

4. Using data to guide decisions – Official ONS data, forecasts from Savills, and rental yield analysis can help you make informed choices and spot opportunities before others do.

The divergence between London and the North isn’t temporary, it’s accelerating. Investors who act now, armed with data, are the ones who stand to benefit most.

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