House Prices Rise
but Regional Gap Widens
Recent figures indicate that UK house prices are continuing
to rise. Nationwide’s house price index
showed that UK prices rose by 0.5% in September. That meant that the annual rate of price
growth increased to 3.8%.
The Building Society’s chief economist was encouraged by the
modest pick up in house price growth, noting that prices rises were stabilising
and somewhat nearer to the pace of earnings growth.
However, there are many that continue to point to the imbalance
between the supply of property and the strong demand from buyers. With fewer properties on the market and
plenty of interest from buyers it would not come as a surprise for there to be
a continued pick up in house price growth.
The UK wide price increase masks a wide range of regional
growth rates. London in particular
continues to see price increases far and away higher than elsewhere in the
country. In fact, Nationwide figures
show that the price of a typical home in the capital is now more than twice the
Far from the rocketing prices of London some areas have
shown a slowdown in the annual rate of growth.
To underline how different the growth rate can be depending on location
a couple of areas saw a small decline in prices.
The regional variation in prices has led to the divide
between prices in the North and South of England reaching a record high. The third quarter of this year saw prices in
the South of England up 8% year on year whilst those in Northern England
increased by just 1%. Putting that into
cash terms means that the gap between average prices in the South and North of
England has exceeded £150,000 for the first time.
However, most areas continued to see gains in the third
quarter and with the risk that construction activity could lag behind
strengthening demand there could continue to be upward pressure on house
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