The North-South divide is back, says RICS

Tom Bawden

The North-South divide, that longdisputed, geographically contentious, sometimes bleak and often bitter economic faultline across the heart of England, reopened just a little further yesterday. New figures showed that house prices rebounded in London and the South West last month, but continued to tumble in the North and in the Yorkshire and Humberside regions.

According to the Royal Institution of Chartered Surveyors’ (RICS) key gauge of house prices, released yesterday, the number of estate agents recording price increases in London in July outnumbered those reporting decreases by 31 per cent. This came after June’s figure of 6 per cent and the -14 per cent recorded in May, when the number of estate agents recording price declines outnumbered those reporting increases.

But the figures made grim reading “up North”. The balance in the Yorkshire and Humberside region in July was -37 per cent and further north it was -23 per cent. In the South West it was a more encouraging 7 per cent and in the South East 2 per cent.

Simon Rubinsohn, chief economist at RICS, said that the figures confirmed earlier indications that the North-South house price divide was returning.

Prices were holding up better in the South because relatively fewer properties were being put up for sale there, he said, blaming the recession for hitting northern manufacturing industries harder than the more nationally focused service industries.

RICS also revealed that the number of properties being put on the market increased in July for the first time since May 2007, albeit by a fraction. Two per cent more estate agents reported an increase in new instructions than recorded a decrease, according to RICS.

“Significantly, the more positive news on prices — at least in some parts of the country — may prompt more properties to come on to the market,” Mr Rubinsohn said.

“If mortgage availability remains insufficient to meet the increase in buyer demand, then it is possible that prices may slip back again, especially if unemployment continues to rise and mortgage rates increase.”

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