House price gap widens between north and south

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The difference in house prices between the North and the South has widened to a record £169,000, according to the latest house price index by Nationwide Building Society.

The average house price in the North of England – which the lender identifies as the Midlands as well as Yorkshire and Humberside, the North West and the North East – is £155,222.

This compares to £324,078 at the other end of the country, which includes the South West, South East, London and East Anglia.

In London, the average price is £472,384, although annual growth slowed to 9.9 per cent in the year to June, from 11.5 per cent in the year to March. Overall, prices in the UK rose by 5.1 per cent to £204,968 in the year to June, although this does not include the effects of the referendum.

Analysts widely expect the Brexit vote will lead to a fall in house prices in the short term, as people become less confident about their finances and job security and they are less likely to want to take on a large mortgage.

Simon French, chief economist at Panmure Gordon, predicts there could be a 5 per cent fall in house prices this year. “It is inevitable that any turbulence in the UK economy is accompanied by doubts over current prices.”

However, he added that interest rates are low and housing stock is still in short supply, which should mean the market would recover.