According to new research from the Halifax, the housing north-south divide is narrowing. The report has shown that while house prices increased by 0.5% in March, there was a marked contrast in house price performance across the UK.
In the first quarter of 2005, prices fell in the southwest and East Anglia, but rose significantly in Northern Ireland, Scotland and Northern England. Yorkshire and the Humber saw the biggest rise in England with a 1.7% increase. The average house price in Scotland broke through the £100,000 barrier for the first time, and rose to £105,397, making Scotland the last part of the UK to reach this milestone. Prices are still highest in London, where the average house price is £241,918.
Our view
This is a fairly standard property cycle. The South always booms first and pulls away (the gap widens) and then as the North gradually starts to pick up, the south slows. At different points the North is still growing when the South is declining. The gap will narrow and then widen as the North starts to go into retreat again and the South steadies and then picks up again in a few years.