19Jan2018

The Great North South Housing Divide

The difference between average house prices in the North and South of England is now £163,000, according to a report by a UK building society. That's almost as much as cost of the average British home. Nationwide said that "prices in the North are now less than half those in the South, a record low." Will the North begin to catch up or will this gap only widen? Steve Barber, Managing Director of Bridging Finance Solutions discusses:

“The housing gap between North and South property divide comes as UK house prices rose by their highest rate in a year this March thanks to the scramble to beat the stamp duty increase deadline, which came into effect on April 1 which also introduced a rise in tax on second home purchases has to 3%.

You can buy 25 houses in the north for the price of an average three bedroom home in the most expensive part of the south. If you have a spare £1.8 million and you want to snap up the perfect home you have two options: a three-bedroom house in Britain's most expensive area or 25 of the same size in Scotland.

London is the third most expensive city in the world, with the second most expensive public transport system. But people will live where there is job availability. This also means a shortage of housing availability. Scarcity drives prices up. It’s not that the space doesn’t exist, but people want to protect their ‘green belt land’, which are areas protected from development. Coupled with tight restrictions on planning permission, this results in higher average house prices.

According to a BBC report in September 2015, the North-South divide is once again evident in light of the difference in house price growth. House prices in the North-East and North-West of England and Wales saw growth of less than 1%, whereas prices in the East and the South-East of England went up by 8.4% and 7.6%, respectively.

To put this into perspective and illustrate the divide, £180,000 can get you a 4-bed detached house with a living room, kitchen, two bathrooms, three toilets, a garage, front and rear garden in Bridgend, Wales. For the same price in Canterbury, London, all you can get is a one-bedroom flat with a communal hall and garden, as well as a joint reception, dining and living room.

 

 

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