North/South house price gap widens
UK house prices are marginally up in October, but the gap continues to widen between the North and the South, according to Acadametrics.
House values rose 0.2% in October, but over the long term, the picture is bleaker. Acadametrics, which looks at completed house prices in England and Wales, reports that property prices have fallen 1.3% year-on-year, with the average house price at £220,056.
The North/South divide continues to plague the market. In London, prices rose 2.5% over the three months to October, but in all other regions of England and Wales, values fell in the same period.
According to the data provider, house prices outside the capital have fallen by an average of 2.7% since October 2010, with the biggest falls in the North of England. Annual prices in this region fell by 7.9% in the three months to October.
"The next fastest fall was seen in the West Midlands at 4.5%, meaning prices in the North are falling about twice as fast as any other region," says Richard Sexton, director of e.Surv.
Dr Peter Williams, housing market specialist and chairman of Acadametrics, comments that October's increase of 0.2% indicates that the market has been "broadly flat" over the past few months.
"Quite clearly, the London housing market is behaving in a different manner to the rest of the country. Without London, the annual rate of house price decline would be -2.7%," he says.
Williams cites a slowing economy, squeezed incomes and high inflation - the Consumer Prices Index measure of inflation hit a record 5.2% in September - as little comfort for any rapid recovery in the market overall.
He adds: "Clearly, there is a great deal of uncertainty but the simple fact is that there is a growing population and a shortage of housing supply – an imbalance which will underpin property values into the future."
This article was written for our sister publication Money Observer
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).