House prices: Split in property values widens

By Kevin Peachey
Personal finance reporter

Image source, PA

Renewed evidence of a north-south divide is emerging in the pace of house price movements in England and Wales, Land Registry figures suggest.

Three areas - the North East of England, the North West, and Wales - saw house prices rise by less than 1% in the year to the end of August.

In contrast, property prices went up by 8.4% in the East of England, and 7.6% in the South East.

Regionally, average prices range between £100,000 and nearly £500,000.

Between July and August, prices fell in the North West, Yorkshire and the Humber and the East Midlands.

Jonathan Hopper, managing director of the buying agents Garrington Property Finders, said: "England's property market is returning to type. Prices in London and the South East continue to march relentlessly upward, while in the North West the dramatic month-on-month fall has all but eradicated the gains made over the past year.

"Even as the number of transactions continues to fall, the north-south divide is reasserting itself with a vengeance."

Previous figures from the Registers of Scotland showed that Scottish house prices in July were 3.5% higher than the same month a year earlier.

Price contrasts

Overall, prices in England and Wales rose by 0.5% in August compared with July. Annually, prices rose by 4.2%, the Land Registry figures show.

That took the cost of the average home to £184,682. This masks a wide range of typical property values, with the average home in London costing £493,026 and the average home in the North East of England costing £100,943.

The sharpest rise in prices in August compared to July was the 1.7% increase in London.

The city is home to a large buy-to-let market, and on Friday the Bank of England warned that mortgage lending in this area had the potential to "amplify" a housing boom-and-bust, and risk stability in the UK economy as a whole.

Lending in the buy-to-let sector has risen by 40% since 2008, the Bank's Financial Stability Committee said.

Some pressure groups and charities have called for house building programmes to assist first-time buyers.

"The autumn spending review is the government's last chance to show they are serious about giving millions of people a fair shot at a stable future by investing in the genuinely affordable homes they desperately need," said Campbell Robb, chief executive of Shelter.

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