If investors want strong capital appreciation, they need to look North!

August 25, 2026

We have been banging this drum for a long time now, and there are still few things more painful for us to hear than an investor saying, “Thanks, but I am looking at something in central London instead,” or, “I don’t know enough about the area, so I think I will stick with London.”

Those two comments probably account for some of the costliest decisions we see property investors making.

There is still a strange belief that London automatically means safety, strong capital appreciation and a sensible long-term property investment. That belief made considerably more sense twenty or thirty years ago than it does today. The London market, particularly Prime Central London, has been struggling for years and the numbers are becoming increasingly difficult to ignore. Knight Frank reported in August 2026 that average Prime Central London prices remained around 23% below their previous peak in 2015.

That is more than a decade of lost ground in one of the most expensive property markets in the country.

The wider London market is hardly making a better case for itself either. The latest UK House Price Index puts the average London property at £553,870 in June 2026, down 2.5% compared with June 2025. Yorkshire and the Humber went in completely the opposite direction. The average property there stood at £207,948, with prices up 3.6% over the same twelve-month period.

Put those figures next to each other and the difference becomes very difficult to ignore.

London: -2.5%. Yorkshire and the Humber: +3.6%.

That is a 6.1 percentage-point gap in annual capital appreciation performance between the two regions.

For every investor automatically dismissing Yorkshire because they know London better, that number deserves some attention. One market has been losing value over the latest twelve-month period while the other has been appreciating. The investor also needs roughly £554,000 to buy the average London property compared with approximately £208,000 for the average property in Yorkshire and the Humber.

You are therefore tying up substantially more capital to gain exposure to the market currently producing the weaker price performance.

This is exactly why investors are looking North.

Central London is not the safe haven it once was

Prime Central London has suffered heavily from taxation, affordability problems, political decisions and repeated changes affecting property owners. Transaction costs are enormous. Stamp duty on a high-value purchase can swallow a substantial amount of capital before the investor has even collected a pound of rent.

There is also a large difference between an investor buying property because the numbers work and somebody buying property because they like telling people they own something in Mayfair, Knightsbridge or Chelsea.

We see plenty of the latter, particularly among overseas investors.

There is nothing wrong with buying an expensive London property because you want one. If somebody has the money and wants a beautiful townhouse in Chelsea, that is entirely their decision. What we disagree with is presenting that purchase as the obvious choice for an investor whose main objective is capital appreciation.

Prime Central London being around 23% below its 2015 peak should make anybody stop and think. On the latest annual numbers, London as a whole is down another 2.5%, and this was the tenth consecutive month in which the capital recorded an annual house-price fall. ONS says those declines have been driven mainly by Inner London.

London flats have been hit particularly hard. The average London flat or maisonette was valued at £431,000 in June 2026, down 4.7% from £452,000 a year earlier. Cash buyers were also paying 4% less on average than a year before.

For an investor buying primarily for capital appreciation, those are not numbers which should be brushed aside simply because the property has a London postcode.

There has been plenty of commentary trying to repackage weakness in London as a fantastic “buyers’ market”. Vendors are negotiating, prices have softened and purchasers have more bargaining power. None of that automatically means the market has reached the bottom.

Buying something because it is cheaper than it was three years ago is not the same as buying something which is good value.

We sometimes describe parts of the London market privately as a garage sale. There is a lot of stock available, vendors are becoming increasingly realistic and buyers can negotiate. The problem is that nobody knows whether the item bought cheaply today is going to be cheaper again tomorrow.

For somebody whose objective is long-term capital growth, that matters far more than getting £50,000 knocked off an asking price.

The arbitrage is becoming difficult to ignore

The difference between London and Yorkshire is not just about one market rising while another falls. There is also a huge difference in how much capital an investor has to commit in the first place.

The average London property is currently around £553,870. Yorkshire and the Humber is around £207,948. That means the average London property costs approximately £345,922 more, or around 2.66 times the price of the average property in Yorkshire and the Humber.

Yet over the latest twelve months, Yorkshire and the Humber produced the better capital appreciation figure.

That is where the arbitrage becomes interesting.

An investor is putting considerably less money into the underlying asset while gaining exposure to a region where prices are currently moving upwards rather than backwards. The £345,000-plus difference between the average purchase prices could itself fund another property, development work, refurbishment or simply remain available elsewhere in the investor’s portfolio.

Even before rental yields enter the discussion, the capital efficiency is very different.

Take £1.1 million as a simple example. At current regional average prices, that amount is roughly equivalent to two average London properties. The same capital is equivalent to more than five average properties in Yorkshire and the Humber.

That does not mean somebody should buy five random Yorkshire houses instead of two London properties. It demonstrates how differently capital can be deployed between the two markets.

For professional investors, family offices and people trying to build long-term property portfolios, that difference becomes increasingly relevant. Concentrating a huge amount of capital into one or two expensive London assets becomes harder to justify when cheaper Northern markets are recording stronger underlying price growth.

We have been watching Yorkshire grow for decades

Our perspective comes from more than 34 years developing and managing property in the North of England.

We have seen Yorkshire through recessions, housing downturns, the financial crisis, Brexit, Covid, interest-rate shocks and countless predictions that Northern property was somehow inferior to London. Through all of that, property prices across Yorkshire and the Humber have continued their long-term movement upwards.

We do not need £5 million townhouses to produce capital appreciation here. We do not need record-breaking penthouses, huge glass towers or glossy international property exhibitions.

Ordinary houses have been growing in value for decades.

Savills has been particularly clear about why it expects this regional divide to persist. Its research argues that affordability is increasingly constraining London and the South, while more affordable Northern markets have more capacity for further growth. Savills has previously forecast annual growth of between 6% and 7% across parts of the North during the stronger stages of the current housing cycle.

The most recent actual figures are already showing that divergence. Yorkshire and the Humber is up 3.6% annually while London is down 2.5%. In Wakefield, one of the areas close to our own operating territory, average prices were up 4.8% in the year to June 2026. North Yorkshire was up 3.1%, East Riding of Yorkshire was up 3.7%, and Kirklees recorded growth of 5.4%.

These are ordinary housing markets producing ordinary transactions between real buyers and sellers. There is no need to manufacture a story around them.

Capital appreciation is never guaranteed and we would never tell an investor that it is. Twenty years of pricing history, followed by the latest regional figures continuing to point in the same broad direction, gives us considerably more confidence than relying on the old assumption that London must eventually outperform simply because it always used to.

Investors need to stop buying postcodes

One of the most common objections we hear from investors outside Yorkshire is that they do not know the area.

Learn it.

If somebody is prepared to spend £500,000, £1 million or several million pounds on property, spending time understanding another part of the country should not be too much to ask.

Investors should be looking at the businesses employing people locally, transport links, proposed infrastructure, new commercial developments, housing supply, planning policy, rents, population movement and what people are actually paying for houses.

Our own operating area around South Yorkshire is a good example. Doncaster is connected by the A1(M), M18 and M180, has direct rail links around the country and sits within a major logistics and employment corridor. Large distribution and employment developments have appeared across the region because businesses recognise how centrally placed it is within the UK.

Those employees need somewhere to live.

We have watched that process taking place for years, and it is one of the reasons we have remained heavily invested in this part of the country ourselves.

The housing is also fundamentally different from much of central London. Investors can still purchase proper freehold houses with gardens, parking, usable floor areas and land around them without paying seven figures simply because of the postcode.

For long-term investors, those fundamentals have always interested us far more than prestige.

Not everything in the North is a good investment

Looking North does not mean throwing money at every cheap house between Birmingham and Scotland.

We are very selective about where we operate.

The North West is one area where we think investors need to be particularly careful. Manchester has unquestionably grown into a major city and attracted enormous investment, but a whole sales industry has developed around selling new-build apartments to investors, particularly overseas purchasers.

We have seen developments launched with very large margins built into the original purchase price, followed by lenders valuing properties below what investors agreed to pay.

An apartment being located in Manchester does not automatically make it a good investment. If an investor pays £300,000 for something that a mortgage valuer thinks is worth £260,000, the impressive brochure and rooftop gym are not going to make the £40,000 disappear.

Parts of the North East concern us for different reasons. Property can appear extremely cheap, and the headline rental yield can look fantastic on a spreadsheet, but investors need to understand the economic conditions underneath those numbers. Some areas suffer from high deprivation, weaker employment prospects and limited underlying demand.

Cheap property is sometimes cheap for a reason.

Yorkshire and the Humber, in our view, offers a far better balance. Entry prices remain sensible compared with Southern England, there is a large and varied employment base, major transport infrastructure, significant logistics activity and decades of recorded residential price growth.

The latest figures simply make the argument harder to dismiss.

The London habit needs breaking

For some investors, buying in London is almost automatic.

They have invested there before, their accountant is there, their solicitor understands the market and everybody in their friendship group knows what a flat in Kensington is. Buying in Doncaster, Wakefield or another Northern market feels unfamiliar.

Familiarity is not the same as safety.

If anything, blindly buying somewhere because it has always been considered safe can become extremely expensive when the market changes underneath you.

Look at what investors are being presented with today.

London average property price: £553,870.

Yorkshire and the Humber average property price: £207,948.

London annual price movement: -2.5%.

Yorkshire and the Humber annual price movement: +3.6%.

Difference in annual performance: 6.1 percentage points in Yorkshire and the Humber’s favour.

That is the arbitrage investors are starting to notice.

You can argue about London prestige until the cows come home, but prestige does not appear on a balance sheet as capital appreciation.

Nobody can tell you exactly what a property will be worth in 2030, 2035 or 2040. We certainly will not pretend otherwise.

What investors can do is look at the evidence in front of them. London is currently losing value annually, Prime Central London remains substantially below its 2015 peak, and Yorkshire and the Humber continues to appreciate while remaining dramatically cheaper to enter.

This is exactly why investors are looking North.

For us, having operated here for more than 34 years, the argument is becoming less about convincing people that Yorkshire deserves consideration and more about asking why any serious property investor would refuse to consider it in the first place.