Business

North-South house price divide hits record high

houses in Petersfield Image copyright Thinkstock
Image caption House prices in the South have accelerated

House prices in northern England are now less than half those in the south of the country, according to the Nationwide - a new record.

On average, a house in the North of England is worth nearly £163,000 less than one in the South.

In the first quarter of 2016, prices in the South rose by 9.9% year-on-year, compared to just 1.8% in the North.

Measured on a monthly basis, the average price of a home in the UK was £200,251.

That is the first time on the Nationwide measure that the price has risen above £200,000.

The building society also said that prices were picking up.

In the year to March, house price inflation across the UK hit 5.7% - up from 4.8% in February and the fastest rate for more than a year.

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One reason for the increase may have been the rush by landlords to buy property ahead of Stamp Duty increases on 1 April, the Nationwide said.

The Scottish equivalent - the Land and Building Transaction Tax (LBTT) - will also see a 3% surcharge.

"The pace of house price growth may moderate again once the stamp duty changes take effect in April," said Robert Gardner, Nationwide's chief economist.

"However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will keep the demand/supply balance tilted in favour of sellers, and maintain pressure on price growth in the quarters ahead."

The Nationwide figures suggest prices are rising fastest in the London suburbs - as corroborated by the Land Registry earlier this week.

Where prices are rising fastest
Region Average price % annual change (Q1 2016 v Q1 2015)
Outer London £344,371 12.2%
London £455,984 11.5%
South East England £255,325 8.3%
South West £221,703 5.8%
East Anglia £204,948 5.8%
West Midlands £168,585 4.1%
East Midlands £162,082 2.2%
Yorks and Humberside £144,361 1.9%
N. Ireland £123,225 1.8%
Wales £141,525 1.7%
North West £144,914 0.5%
Scotland £139,911 -0.2%
Northern England £123,864 -1.1%
source: Nationwide

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