New research shows that the north-south divide over house prices is not only continuing but is getting significantly worse.
High-end agency Savills, in research conducted for the Sunday Times, has looked at how many homes in different regions of Britain could be purchased for the price of one typical property in Greater London.
In 2005 the average Greater London home cost £289,939 and would have purchased one and a quarter homes in the south east and just over two in the likes of Yorkshire or Wales. But in 2015 the typical Greater London home cost £539,519 says Savills - enough for over three average-priced homes across northern England, Wales and Scotland.
Savills’ residential research director Lucian Cook is quoted in the Sunday Times as saying there are two reasons for the widening regional gap.
“London’s housing market, particularly in the centre, was effectively over the recession by the end of 2009 and continued its recovery very quickly. Places like the north of England and much of Wales, by contrast, haven’t been able to do the same. They’ve less inward migration and so less demand, and they‘re still tackling some de-industrialisation” explains Cook.
The research shows that the gap between London and even some of southern England has grown significantly over the same period. For example, in 2005 the cost of a London home could have bought just under one and a half in the south west: now it would buy you well over two.
“There’s been less of a ripple effect than usual from London to the rest of the south. Between 1995 and 2005, for example, London pulled away from the rest of the south but then those regions caught up. That hasn’t happened in the past 10 years.”
Meanwhile Savills warns that even within London itself the gap between rich and poor is growing.
The wealthiest quarter of electoral wards in the capital have seen their average house price soar 132 per cent between 2005 and 2015 whereas the poorest quarter of wards have appreciated by a more modest 51 per cent.