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House prices: widest ever gulf between north and south

House prices in the south are now more than double those in the north, according to property website Rightmove.

 
House prices: widest ever gulf between north and south

House prices in the south are now more than double those in the north, according to Rightmove.

Asking prices in southern regions, such as London and East Anglia, rose by 4.7% in October, while northern regions, including Wales and the West and East Midlands, fell 0.7%.

The difference means the average property price in the south is now £336,743, compared with £164,347 in the north – the widest gulf ever recorded, according to the property website.

The national average increase, meanwhile, was 2.8%, with prices 1.2% higher than this time last year.

Mortgage approvals have increased to their highest level since November 2009, indicating a slight easing in the mortgage famine, Rightmove said. Figures from the Council of Mortgage Lenders (CML) last week showed the number of loans taken out is up 30% on last year, with lending levels to both first-time buyers and home movers at their highest for over a year.

Miles Shipside, the director of Rightmove, said: ‘Wider access to mortgages and rising asking prices are early signs of increasing demand, giving home owners some grounds for hope of a market recovery. However, the reality is that there is further evidence of the two-tier twist, which is dogging the return to more widespread liquidity in the housing market.

‘Those trading up will benefit from already being on the housing ladder, though the gap to trade up to the next rung is a bigger financial leap when prices rise like this and desirable homes are in short supply,’ he said. ‘Those who are not property owners, such as first-time buyers or those taking an ownership break in the rented sector, will either have to spend more or compromise on what they can afford.’

The news comes just a week after a report by the Royal Institution of Chartered Surveyors (Rics) revealed that prices fell last month and expected to continue falling for the rest of the year.

A recent survey by the Department of Communities and Local Government (DCLG), meanwhile, showed that although house prices have been inching up in the past three months, they are still 1.3% down on last year.

6 comments so far. Why not have your say?

Steven Cox

Oct 17, 2011 at 12:45

Great news for us up here in the green and pleasant north, where our money buys us decent-sized properties with good access to local and national road and rail networks.

Tried living in the south-east for several years, and I'll never go back!

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Nigel Bradley

Oct 17, 2011 at 13:00

The 2.8% increase is, when you look at it, an increase in "new sellers' asking prices". Sellers can ask what they like.

I'd rather trust the latest Land Registry figures which are a record of actual prices paid showing an annual overall reduction in prices of -2.6%. This is on August 2011 figures released September 2011. New figures available 28 October 2011 - watch this space.

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Allen Williams

Oct 17, 2011 at 20:29

Nigel is correct - asking price movements are not a reliable means of assessing market prices. There is little doubt that were the housing market a typical one it would be overdue for a downward "adjustment" but as the home is often a disproportionate proportion of household wealth, potential sellers are reluctant to settle for what the market might indicate. I can only suggest that, prices being rather lower outside the fleshpots of the south east, this effect may be correspondingly lesser. Or it may be that we up north have a rather more realistic and down-to-earth understanding of economics.

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george partridge

Oct 17, 2011 at 23:21

The price " rise" if there actually is one, is only driven by the desire to realise some sort of buffer against iflation by those with some capital, who are investing in the by to let, market, as interest rates are so low. With the rise in unemployment, this slight drive in the market can only prove to be a blip, in a housing market in a long period of decline. Invested for income, yes, but do not expect asset appreciation in this market.

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john cornford

Oct 18, 2011 at 09:09

what is the point telling us 'average' prices ? Average house sizes might be smaller up north for all we know. Why not price per sq foot or whatever ?

Why are commentators on house prices so innumerate ?

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charlie 12

Oct 18, 2011 at 09:18

Good point John - however it is very unlikely that houses in the north are significantly smaller - they may even be bigger. Let's create an index which the rest of the country can follow - the price of a Coronation Street house compared to an Eastenders one.

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