Friday, 23 August 2019

UK house prices point to North-South divide

UK house prices point to North-South divide

UK house prices rose by 2.2 per cent during the second quarter of the year, according to the Halifax.

Compared to the same period in 2018, prices were 5.4 per cent higher — the strongest increase seen on this measure for two and a half years.

A spokesman for IHS Markit said: “The upturn in prices in the second quarter of the year has lifted the standardised house price to a new record level of £239,708.

“Looking at the year to date, prices are currently running around four per cent higher than 2018 levels.

“If maintained at this rate, 2019 would be the best year for house price growth since 2016, though inflation would remain well below the long-term average of over six per cent.”

Looking at house prices by region, there were some notable divergences between different parts of the UK during the second quarter of this year.

House price trends were especially positive in the North West, Scotland and Wales, with prices up in each case by over four per cent since the previous quarter.

By contrast, price changes were much more subdued in the South of England and, in some instances, even negative.

Most notably, East Anglia registered a 1.2 per cent fall in prices, while prices were little changed in Greater London.

In the South East, prices rose by 1.8 per cent since the previous quarter, but were up only 1.1 per cent on the year.

Elsewhere, prices declined in the East Midlands by one per cent year on year, while the neighbouring West Midlands saw prices unmoved.

In terms of prices paid, Greater London remains comfortably the most expensive area to purchase a home, with an average price of £493,580, followed by the South East (£352,774).

The South West (£260,534) and East Anglia (£242,231) continue to record price levels above the national average.

In contrast, as was the case in 2018, the cheapest places to purchase a house were Northern Ireland (£134,332) and the North of England (£140,906). These two regions have also performed the worst in terms of price trends over the past decade.

Since the second quarter of 2009, prices have risen by just 12.3 per cent in the North of England, the worst result of all nine English regions.

In Northern Ireland, prices remain over 11 per cent down compared to a decade ago.

Conversely, Greater London remains comfortably out in front in terms of 10-year house price inflation.

The latest figures indicate that prices are 104 per cent higher than a decade ago, compared to 67.4 per cent in the South East, 67.1 per cent in East Anglia and a UK average of 50.9 per cent.

Paul Smith, economics director at global information provider IHS Markit, said: “Although at the headline level the house price index points to a
pick-up in the market during the spring, the regional data provide signs of an emerging North-South divide.

“Prices are currently either falling or rising only very slowly in much of the South of England compared to stronger gains in areas such as the North West, Scotland and Wales.

“Moreover, recent trends in the monthly data suggest inflation has likely peaked and, based on the current prevailing UK macroeconomic environment, will slow in the second half of the year — especially as political and Brexit-related uncertainty ratchets up again in the autumn.”

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