Housing market gap between north & south England

There has been an increase of over £15,000 in the north-south divide in England's house prices during 2007, this comes despite growth in all regions of the north except Yorkshire and Humberside, Nationwide stated this week.

Figures from Nationwide show typical house in the south of England is almost £90,000 higher than in the north which was originally a £75,000 difference.
The gap has been opening since 2004, and widened in 2007 as prices in the south grew by 9% compared with an annual growth rate of 3.4% in the north.

Nationwide stated that the recent years saw prices in the north catch up with those in the south, however the gap is now back to a similar level to 10 years ago.
Its figures, which focus on prices in the last three months of 2007, show the London market remaining buoyant, despite a recent slowdown in the economy.

The annual growth rate in the capital fell from 16.5% to 12.8% in the last quarter, but it remains the highest in England and second in the UK with Northern Ireland experiencing the highest increases.

Nationwide stated the property market fell by 0.2%, the fist quarterly price fall in five years in Northern Ireland. This still resulted in an annual growth rate of 24.2% which makes it the highest in the UK.

In 2007 property prices in Northern Ireland have increased by almost £120 a day.
Across the UK, the annual rate of price growth is believed to stand at 6.9% which is considerably lower then previous years yet still substantially higher than annual inflation.

0% Growth predicted by the end of 2008
Although shortage of housing stock will ensure demand in some areas it is unclear how the market can continue at rates experienced up until last year.

Nationwide building society, the largest lender in the UK, has predicted house prices increases will fall to 0% growth in much of the UK by the end of the year.
Nationwide BS’s chief economist, Fionnuala Earley, stated;

"While insufficient supply is supportive of house price growth, it does not mean that prices will continue to increase at the pace of recent years.

"In a period of poor affordability or uncertainty demand can become more elastic, and even those who want to start up an independent home can be frustrated by financial or other constraints.

"In the short term, supply issues are likely to provide some support in the areas where supply constraints are most critical, but over the longer term the growth in pent-up demand is likely to mean that the market will turn around more rapidly once confidence and affordability have been restored to more usual levels."

This is following the latest figures from the Bank of England showing new mortgage applications down from 89,000 to 83,000 which represents a three year low.

Written by Daniel Morgan
Independent Mortgage Broker