Business

North of England now has lowest house prices in UK, says Nationwide

houses by Angel of the North Image copyright Getty Images
Image caption Homes in the North of England have become the cheapest in the UK

The lowest house prices in the UK are now in the North East of England and Cumbria, according to the Nationwide.

Previously Northern Ireland had the cheapest homes in the country.

But while prices have been rising in Northern Ireland and Scotland, the North saw prices fall by 1% over the last year.

Prices in the UK overall rose by 5.1% in the year to June, up from 4.7% last month. The figures do not yet reflect the result of the EU referendum.

Between June and May prices rose by 0.2%, the Nationwide said, lifting the average property price to £204,968.

"Ultimately conditions in the housing market will be determined by conditions in the wider economy, especially the labour market," said Robert Gardner, Nationwide's chief economist.

"It is too early to assess the impact of the referendum vote on the economy."

North South divide

The average price of a house or flat in the North of England has fallen to £123,914 in the second quarter of 2016, compared to the same period last year.

It is now the only area of the UK where prices are dropping, according to the Nationwide.

At the same time prices in Northern Ireland rose by 1.6%, bringing average prices up to £128,562.

In Scotland, prices rose by 0.5% - the first quarterly increase after four consecutive declines.

On average homes cost £141,245 north of the border.

The gap in average prices between the North and the South has also increased to nearly £169,000, according to the Nationwide figures.

That is another record high, and £24,000 higher than a year ago.

Where are house prices lowest?
Region Average price Annual change this quarter
North of England £123,914 -1.1%
Northern Ireland £128,562 1.6%
Scotland £141,245 0.5%
Wales £145,973 0.9%
Yorkshire and Humberside £148,587 0.8%
North West £149,572 1.8%
East Midlands £166,956 4%
West Midlands £174,389 5.1%
East Anglia £209,791 5.5%
South West £227,447 5.6%
South East £265,638 8.8%
Outer Metropolitan £354,787 12.4%
London £472,384 9.9%
source: Nationwide Quarterly Index

Even though the overall figures show a slight increase in house price inflation in the year to June, experts predict that the EU referendum result will have a big impact on prices in the months ahead.

"Housing market activity and prices now look to be at very serious risk of an extended, marked downturn following the UK's vote to leave the EU," said Howard Archer, the chief UK and European economist at IHS Global Insight.

"This is likely to weigh down markedly on economic activity and consumer confidence, which is not good news for the housing market."

Others said that London would be likely to be hit the hardest by price slow-downs.

"The referendum result has since plunged the property market into a 'hard reset', especially in the higher price brackets," said Jonathan Hopper, managing director of Garrington Property Finders.

"While we can't be sure how much things will slow, it's inevitable that more nervous investors will sit on their hands while the opportunists circle.

"Prime central London - where most property purchases are discretionary - is the most exposed to such confidence-sapping doubts."

Where can I afford to live?

Related Internet links

The BBC is not responsible for the content of external Internet sites