Property

North-South house price disparity predicted to 'dramatically' narrow

Property Reporter
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22nd November 2021
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Following years of lagging behind the south, house prices in the north are now rising faster than any other part of the country with Liverpool, in particular, proving to be a property market's hottest region.

Jonathan Rolande from the National Association Of Property Buyers said the pandemic had turned the price divide on its head and predicts further narrowing was to come.

Mr Rolande said: “Unexpectedly, the pandemic factor has had a positive effect on the market and there has been a re-balancing of prices between north and south.

“This should be embraced. London and the southeast have for too long dominated the wider economy and suppressed growth. Increased growth in the north, which I can see continuing, is helping to create a more equitable market.

“The slump in flat prices is caused not just by the new desire for outside space, but by adverse publicity around maintenance charges, sky-high ground rent increases, lease renewal costs and the cladding scandal. Buyers now want more control of their expenditure by purchasing freehold.

“Broadly, sustainable price rises are welcomed by many as they provide the 'feel good factor' to homeowners, encouraging them to spend in the wider economy and providing employment to local tradespeople and businesses. After the devastating financial impact of lockdowns, this is helping to jump-start the economy.”

His comments come as figures released by the Land Registry show how over the past three months, prices in the northwest, which takes in towns and cities including Manchester, Liverpool and Blackburn, have climbed by 5.3 per cent. On average, it costs £203,661 to buy a house in the northwest, the Land Registry found.

Prices in the East Midlands have risen by 14.7 per cent since this time a year ago, where houses are now worth, on average, £231,318. Just pipping the region for second place was Wales, where prices are at an average £196,216 — up 15.4 per cent year-on-year.

House prices in the northeast have gained 13.3 per cent over the past year, although at an average of £152,776 it remains the cheapest region in England.

There were plentiful gains for nearly all other parts of the country, although London, which has been the fastest-rising region in the British property market for years, was a noticeable underperformer.

The capital was hit particularly hard by the pandemic, which led to residents trying to move out of London or into bigger houses with more garden space. As a result, the cost of a house in the capital has risen by only 2.8 per cent over the past 12 months. However, with an average price of £507,253, London remains by far the most expensive region of the UK in which to buy a home.

The pandemic not only has changed where people want to live but also in what types of property. Amid the "race for space", detached house prices in England have jumped by 13.4 per cent to £447,617, the Land Registry said. By contrast, flats have appreciated in value by 5.8 per cent, with the average in England being worth £241,884.

Overall, house prices in England and Wales have risen by 11.8 per cent since last September to an average of £269,945. Over the past three months, prices have risen by 2.5 per cent, despite the stamp duty holiday ending at the end of September.

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