Savills have reported  that even though concerns about the economy and tax environment have left the general UK housing market subdued over 2025, more affordable regions such as  the North East have proved the most resilient. The ONS show that house prices in County Durham

were up 7.5% between the periods of August 2024 to August 2025. This was even higher than the rise in the North East which was 6.6% over the same period.

Savills forecast that affordability will once again become the key influence on house price performance, leading to regional variances putting North East at the top of regional house price growth for the next 5 yrs, alongside Yorkshire and the Humber with a forecast of 28.8% rise in property prices in the North East over the next 5yrs.

“Regional performance is largely influenced by where we are in the housing market cycle. Since 2016, we’ve been in the second half of the cycle, where the more affordable regions in the North and Scotland outperform the UK average, and capacity for growth in London and the South is more limited,” comments Dan Hill, research analyst at Savills.

Better times ahead?

Over the longer term, while the pace of interest rate cuts is slower than expected, they will still play a role in boosting demand and driving price growth across the UK over the next five years, says Savills.  Further cuts will be supported by the relaxation of mortgage rules earlier this year, allowing some buyers to borrow more relative to their incomes.

Beyond 2026, the UK economy is also expected to be materially stronger, with low inflation, rising GDP growth, falling unemployment, and an undersupply of new homes which will maintain upwards pressure on real prices.

Source 1: Savills Research using Oxford Economics and Nationwide* (Note: These forecasts apply to average prices in the second hand market. New build values may not move at the same rate.) **Five-year figures represent total growth over the forecast period (including compounding), so are higher than the sum of the individual annual growth rates

Source 2:ONS Housing prices in County Durham