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House Price Gap Between North and South of England Hits New Record

The price gap between property values in the North and South of England has reached a record high, leaving property owners in the south with homes worth over £150,000 more than their northern counterparts.

The newest monthly index issued by the Nationwide Building Society confirms that property values in southern England have gone up by a substantial eight percent annually.

At the same time, those in the North have gained only one percent in the last 12 months.

Nationwide representatives stated that average prices in the South are now twice as high as those in the North.

The report added that the rate of growth in property prices in southern England has continued to outperform those in the North for the past six and a half years.

Nationwide also revealed that across the nation, property values went up by 0.5 percent in September to reach an average £195,585, representing a 3.8 percent increase on last year.

Nationwide chief economist Robert Gardner pointed out that the rate of growth in house prices has been slowing down since mid-2014, with increases appearing to tally closely with wage growth.

However, the risk remains that construction output will trail behind growing demand, sending house prices skyward and eventually having a negative impact on affordability.

The overview across in regions in the third quarter of this year was a mixed one, with the rate of property growth going up in southern England, especially in London, but decreasing in the Midlands and most areas in the north.

The London market continues to lead the rest of the UK, with the annual rate of property value growth in the city now increasing to 10.6 percent.

The average house price in London is currently £443,399, which is more than double the amount experienced across the UK as a whole. It is also three and a half times the average house price in the North, which is typically around £124,345.

House prices in Northern Ireland continue to recover, with an annual 6.5 percent growth taking the average value to £127,562. Prices remain, however, at 44 percent below their pre-crisis peak.

There was also a 1.9 percent year-on-year increase in Wales, where the average house price is £146,854.

 

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House prices in Scotland fell 1.3 percent year on year, taking the average value to £140,402. The only other area in the UK to experience an annual fall was the North West of England, where values are down 0.6 percent.

Property analyst Hometrack recently commented that the gap between prices in London and those in other larger UK cities was at an all-time high. This continual increase was likely to have a knock-on effect elsewhere, as buyers may reach the point where they abandon the idea of living in or around London and start looking for homes in nearby cities. According to Hometrack, average property prices in London are already over 12 times the average earnings.

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