House prices – the divide widens
April 2016

The UK’s north-south divide in house prices is growing even wider with new Government statistics showing that prices actually fell in Scotland while South East England rose by more than 11%.

The annual average price change to February, according to the Office of National Statistics, showed an all UK increase of 7.6%, while England’s 8.2% increase was largely boosted by the South East at 11.2%, the East 10.3% and London 9.7%. By contrast, Wales put on 2.8% and Northern Ireland 2.4% while prices in Scotland fell back by 0.8%.

Meanwhile, the Nationwide House Price Index reports that the recent pick-up in the housing market with a strong upturn in mortgage approvals may be partly due to potential second-homers rushing to complete ahead of the stamp duty changes.

Its Chief Economist Robert Gardner concluded: “This temporary boost to demand against a backdrop of continued constrained supply is likely to have exerted upward pressure on prices and helped to lift the pace of annual price growth out of the fairly narrow range of 3%-5% that has been prevailing since the summer.

“The pace of house price growth may moderate again once the stamp duty changes take effect in April. 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.”