House price gap between north and south widens in UK

Taylor Scott International News

UK annual house price growth increased to 5.7% in March, taking the average price to £200,251 but the latest index also shows that the gap between north and south continues to widen. Annual house price growth recorded its strongest pace since February 2015 up from 4.8% the previous month while month on month home prices increased by 0.8%, according to the data from leading UK lender the Nationwide. Average house prices in England increased by 1.8% in the first quarter of 2016, and were up 7.7% year on year. This means that in cash terms, the gap in average prices between the South and the North of England now stands at nearly £163,000. Prices in the North are now less than half those in the South, a record low. ‘There has been a pickup in housing market activity in recent months, with the number of housing transactions and mortgage approvals rising strongly. This is likely to have been driven, at least in part, by upcoming changes to stamp duty on second homes, where buyers have brought forward purchases in order to avoid the additional tax liabilities,’ said Robert Gardner, Nationwide's chief economist. ‘This temporary boost to demand against a backdrop of continued constrained supply is likely to have exerted upward pressure on prices and helped to lift the pace of annual price growth out of the fairly narrow range of 3% to 5% that has been prevailing since the summer,’ he explained. He pointed out that the pace of house price growth may moderate again once the stamp duty changes take effect in April. ‘However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will keep the demand/supply balance tilted in favour of sellers and maintain pressure on price growth in the quarters ahead,’ he said. Gardner also pointed out that according to Royal Institute of Chartered Surveyors, the stock of houses on estate agents’ books remains close to all-time lows on data extending back 30 years. The quarterly index, published at the same time, shows that regional house prices maintained the same broad trends prevailing in recent years with southern regions continuing to record significantly stronger rates of annual price growth, further widening regional disparities. The Outer Metropolitan was the strongest performing region in the first quarter of 2016, with average prices up 12.2% year on year. London was close behind, though it did record a slight moderation in its annual rate of growth to 11.5% from 12.2% the previous quarter. The North was the weakest performing region in England and the UK overall, with prices down 1.1% year on year. House price growth slowed sharply in Northern Ireland, with annual growth moderating to 1.8%, even though the price of a typical property is still 45% below the pre-crisis peak. Wales saw a lacklustre 1.7% year on year increase in prices, a slight pick-up compared with the previous quarter while Scotland recorded… Taylor Scott International

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