Southern housing market outperforms north

The housing market in the south of England is now strongly outperforming the market in the north.

Data for June shows that the average house price in the south has risen by 9.4 per cent during the last year, compared to an average annual rise of only 2.7 per cent in the north.

This signals the end of a four-year trend where the gap between house prices in the north and south of the country has been narrowing, according to property website Rightmove.

As recently as last September, the average property was only 46 per cent more expensive in the south of the country; but this has now widened to 55 per cent.

"The buoyancy of the southern economy and demand for quality property by affluent buyers are having the effect of increasing homeowners' net worth even further," said Rightmove commercial director Miles Shipside.

"With hindsight, the best time to move from the north to the south and 'bridge the gap' was in September last year ... Parts of the north are now being left behind, as stretched affordability has limited sellers' ability to increase prices in most regions."

The strength of the market in the south is behind the 0.8 per cent rise in house prices in the month to June 10th.

Across England and Wales, the average property asking price is £211,442, up from £209,829 in May and 6.4 per cent higher than June 2005.

Rightmove warns that a rise in interest rates would be likely to hit the housing market in the north hardest, where the annual house price rise is only 0.5 per cent above the rate of inflation and where affordability has reached its limits.

"Demand and transaction levels are still healthy in the north despite the slowdown in prices," Mr Shipside added.

"Any upward movement in interest rates could put this in jeopardy at a time of year when the market normally slows down." XXX