House prices in the North East have grown at 18 times the rate of property prices in London over the past 12 months, latest figures from the Office for National Statistics show.

Homes in the North East have risen 14.3 per cent in the 12 months to March, the ONS revealed.

Meanwhile, homes in the capital have risen just 0.8 per cent during that time.

Overall, house prices across the UK are up 6.4 per cent in the 12 months to March, the highest annual jump since December 2022, thanks in part to buyers rushing through purchases before high stamp duty bit in April.

The average property is now worth £271,000 the ONS says, which is £16,000 higher than 12 months ago.

The ONS says yearly house price growth has been generally increasing since its recent low point in December 2023 when prices fell 2.7 per cent.

King of the housing market: House prices are surging in the North East of England but languishing in the capital. Pictured Newcastle and a Knightsbridge house in London

Experts across the property industry says changes to stamp duty from 1 April have played a major role in the recent house price surge.

From 1 April the nil rate thresholds dropped from £250,000 to £125,000 for home movers. On a £250,000 property purchase that meant paying an extra £2,500 in upfront taxes.

First time buyer relief dropped from £425,000 to £300,000. Instead of paying no stamp duty on a purchase worth £425,000, they now pay £6,205.

Given that the ONS figures relate to March, this is just before the change happened and many buyers were trying to rush through purchases to avoid the additional costs.

Jonathan Handford, managing director at national estate agent group Fine & Country said: ‘March saw a final surge in house prices as buyers raced to beat April’s stamp duty changes, a deadline that drove a sharp uptick in activity and pushed values higher across the board.

‘This trend played out nationwide, with early 2025 marked by elevated demand from buyers keen to maximise their budgets before the new thresholds came into effect.

‘Now that the tax break window has closed, it’s likely we will see a cooling period, as buyers pause to reassess affordability under the revised rules.

‘Rather than a sharp correction, the outlook points to a more balanced market over the coming months, with modest price movements and cautious optimism as buyers and sellers adapt to the new landscape.’

The stamp duty effect meant that house prices surged in the more affordable parts of the UK, according to Jonathan Hopper, chief executive of buying agency Garrington Property Finders.

While the North East saw house prices rise 14.2 per cent year-on-year, homes in Yorkshire and The Humber were up 9.5 per cent and in the North West, they were up 9.4 per cent.

‘The distorting effect was strongest in regions where price rises were already running hot,’ said Hopper. 

‘Petrol was poured on fire in North East England – where the average price paid spiked 4.2 per cent in just a month and annual inflation climbed to a dizzying 14.3 per cent. 

‘Across northern England, prices rose by more than 2 per cent over the month and more than 9 per cent on an annual basis.

‘With average prices falling in London in March, the north-south divide widened and it was the northern powerhouses that dragged the national average up to 6.4 per cent over the year. Impressive though this is, it is likely to prove a high water mark.’

While prices rose in March, the latest survey by the Royal Institution of Chartered Surveyors (Rics) revealed its weakest outlook since mid-2023. 

The closely-watched monthly survey takes the temperature of Rics members and gives a snapshot of what is happening on the ground in the property market across the country. 

It found that more Rics members think house prices are headed lower over the coming months, than those who think that prices are heading higher.

Many members also said buyer enquiries are down and that fewer sales are being agreed.

‘Many estate agents returned to tumbleweed territory in April, and the pace of price rises cooled in many areas,’ added Hopper.

‘In May, the dust has settled and price movements are once again being dictated by the forces of supply and demand.

‘The market is being led by homebuyers, not investors. People are not chasing gains, they are chasing stability, value and the opportunity to get on with their lives.

‘Strong demand is pushing up prices in northern England and other regions where buyers see that their money goes further, where the price-to-earnings ratio still makes sense, and where mortgage repayments can often be lower than rental costs.’

While house prices in the north are booming, homes in the more expensive south are rising more slowly.

While London prices are only up 0.8 per cent year-on-year, average prices in the South West and South East are up 5.3 per cent respectively.

‘Average prices paid in London have now fallen for two months in a row,’ said Hopper. ‘After flatlining in 2024, annual growth in the capital is still modest, with family homes in particular getting cheaper.

‘Across southern England we’re seeing lots of high-value homes coming onto the market in sought-after areas, and this abundance is putting buyers firmly in the driving seat and giving them the confidence and clout to negotiate hard on price.

‘This is not a boom, it is a recalibration. Buyers are being selective and strategic, and the market is rewarding value over vanity.’