North south price divide grows
Monday, 17 October 2011 9:11 AM
The widest gulf in house prices between the north and the south is feeding fears of a two-tier property market.
Rightmove's monthly house price index, released today, shows the biggest north/south divide since records began in 2003.
Average property prices in the north are £164,347, compared with £336,743 in the south.
The house prices in the south amount to more than double that of the north and there are fears that such a differential could hamper growth in the market.
Miles Shipside, a Rightmove director, said: "For the average asking price of a property in the south you could now buy two average properties in the north and still have enough change left to buy new carpets and curtains."
Asking prices in the south have boomed by 5.4 per cent since the start of the credit crunch four years ago, however in the north they have spiralled 9.6 per cent.
Shipside continued: "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.
"While those in the affluent south may have cause to celebrate their prices being well up on this time last year, prices in the north continue to go backwards."
Over the last year new sellers in the north have felt the need to reduce their asking price by on average 2.6 per cent, whilst those in the south have put prices up by 3.9 per cent.
The capital remained ahead of the rest of the country, with an average house price of £450,210, an all-time high.
Kensington and Chelsea was London's best performing borough, with a mammoth average house price of £1,917,895, up from £1,798,547 last month.
David Hollingworth, head of communications for London & Country Mortgages, told AboutProperty: "The London market is very different to the rest of the country and continues to surge when others falter, fuelled at least in part by foreign investors that see the London market as a safe haven.
"In more general terms however the housing market remains at low transaction levels and although the mortgage market has been gradually easing there are renewed fears over the eurozone that are putting pressure on lenders' funding costs. That will not make life any easier for prospective first time buyers which in turn will continue to hold back growth in transaction numbers.
"Although long term trends would suggest that the divergence would not continue to grow it's hard to see the gap narrowing dramatically in the short term in such an uncertain market. There's likely to be a need for a significant return of buyers and growth in market confidence in the north before asking prices reverse their current trend and accelerate in the other direction."
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- house prices ,
- north south divide ,
- rightmove
