North-south house price divide shrinks

The gap between house prices in London and the rest of the UK is at its lowest level in almost eight years, new research has revealed.

11:38 23 July 2005

The gap between house prices in London and the rest of the UK is at its lowest level in almost eight years, new research has revealed.

Property prices in Greater London are now 1.47 times higher than the national average, having been almost twice as high in 2001, said the mortgage-lender Halifax.

Research by the banking group also confirmed that while property prices in the capital have fallen over the last year, they have increased by more than 40 per cent in other parts of the country.

Between April and June the average London property cost 238,950, down from 2.5 per cent on the same period last year. The average price of a property across the rest of the country was 162,850, up 3.7 per cent, Halifax said.

The gap between property prices in the capital and the rest of the UK is at its smallest since the fourth quarter of 1997, the research found.

The study also found that all ten towns recording the biggest property price increases were located outside southern England, with Scotland and Wales dominating the list of areas seeing the largest rises.

Property prices in the Scottish town of Irvine in Strathclyde increased the most, with a 44 per cent rise bringing the average house price to 100,249.

Home owners in Port Talbot in West Glamorgan saw the next biggest increase in the value of their properties at 43 per cent followed by
Motherwell in Strathclyde (41 per cent), Glenrothes in Fife (39 per cent) and Blackwood in Gwent (38 per cent).

Halifax said those areas where house prices had traditionally been the lowest had seen the largest increases in property prices as buyers sought out affordable housing.

"Areas outside southern England, particularly in Scotland and Wales, have experienced the most buoyant housing market conditions over the past year," said Halifax chief economist Martin Ellis.

"It has been those areas where prices have, on average been lowest that have delivered the biggest gains in prices as property remained more affordable in those places."