North-south house price divide widens

Figures published yesterday by Nationwide Building Society show the widening gap between in property values in London and the South-east and the rest of the UK.

In the third quarter of 2015 alone, prices in London rose by 10.6%. But during the same period, values in the North-west of England and Scotland actually fell.

Nationwide’s figures showed that average annual house-price inflation rose to 3.8% in September.

Nationally, the typical property is now worth £195,585 while in London the figure is well over twice as high at more than £443,000.

Robert Gardner, Nationwide's chief economist, said: “UK house prices increased by 0.5% in September, with the annual pace of house price growth picking up modestly to 3.8%, from 3.2% in August.

“The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth. However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.”

But the picture in London was drastically different, Gardner added. “The capital has continued to see price growth at or above the rate in the UK overall over the past four quarters,” he said. “The annual rate of price growth in London is currently the highest in the country and actually accelerated to 10.6% in Q3, up from 7.3% in Q2.

“The gap between London house prices and the rest of the UK has continued to reach new highs. The price of a typical home in the capital – £443,399 on our measure — is more than double the UK aggregate and more than three-and-a-half times the price of the typical property in the cheapest UK region, the north of England.”