For years, bricks and mortar have been seen as one of Britain's safest long-term investments. But with the era of ultra-low interest rates now firmly in the past, exclusive new data raises a critical question: is property still a good bet?
A Tale of Two Britains: Regional Returns Diverge
An exclusive analysis for Money, examining HM Land Registry and inflation data from 2011 to 2025, reveals a stark postcode lottery for homeowners. The research, conducted by Interest from Moneyfacts, adjusts all figures for inflation to show the real-terms gains or losses.
Over the entire 15-year period, the standout winner is the East Midlands, where property owners achieved average real returns of more than 24%. London also performed strongly as a long-term holder, with gains of almost 23%.
At the other end of the scale, homeowners in the North East suffered an average real-terms loss of 2.21%. This broad picture, however, masks dramatic shifts in fortune across three distinct phases of the market.
The Low-Rate Boom and the Great Rebalancing
The 2010s were defined by the Bank of England's efforts to stimulate the economy after the 2008 crash. With borrowing costs at historic lows, the early part of the decade followed a familiar pattern.
Between 2011 and 2015, London property was king. Homeowners in the capital saw colossal real returns averaging 30.73%. Meanwhile, the North East, North West, and Yorkshire and the Humber all recorded losses.
The landscape began to change in the decade's second half. As salaries grew and mortgage rates stayed below 4%, buyers nationwide could borrow more. The East Midlands surged to the top spot, with returns hitting 16.8% between 2016 and 2020, overtaking London's 9%.
The North West saw returns jump to 11.2%, and the North East broke even, signalling the start of a major rebalancing.
The Correction: Affordability Bites Back
The trend accelerated sharply as interest rates climbed in the 2020s. By the 2021-2025 period, the tables had turned completely.
Londoners, facing the most stretched house price-to-income ratios, were losing money at an average rate of 13.42% in real terms. The East, South East, and South West also fell into negative territory.
Conversely, the North East, with its lower prices and stronger affordability, saw positive growth of 4.73%. While returns dropped elsewhere in the country, areas like the North West, Wales, and Northern Ireland continued to deliver positive real returns even as rates rose.
Expert Insight: A Market Seeking Sustainable Footing
Adam French, Head of News at Moneyfacts, interprets the data as a story of market correction, not collapse. He explains that the policy of ultra-low rates artificially inflated prices, particularly in London and the South East, making long-term affordability tough.
"Our analysis reveals that areas which benefited most from those artificially cheap borrowing conditions have felt the biggest real-terms reversals since rates have risen," French stated.
"When mortgage rates normalised, the housing market lost the tailwind that had supported a decade of rapid price inflation." He suggests the current adjustment may simply be the market rebalancing after a distorted period.
What This Means for Buyers and Sellers
The analysis carries clear implications for the public. For first-time buyers, it indicates that house prices are now being shaped more by income and affordability than by cheap credit, which could be welcome news for those saving a deposit.
For sellers, especially in the South, it underscores the need for realistic pricing. French notes that more affordable regions, which were less inflated during the low-rate decade, are proving more resilient now.
The shift towards greater sustainability may ultimately help prevent a more painful crash, suggesting a cautious optimism for the UK property market's future stability.
