The housing market is increasingly revealing a north-south divide according to a property commentator.
Jonathan Hopper, chief executive of Barrington Property Finders, says it’s down to the Budget, scheduled for just over two weeks from now.
His comments come on the back of the latest Halifax house price index which shows that October saw the biggest monthly rise in UK house prices since January this year, with the value of the average UK home increasing by +0.6% (£1,647).
That brings the typical property price up to £299,862 – the highest on record – while annual growth also increased to +1.9% (from +1.3%).
Hopper says: “The direction of travel on prices has been seesawing. On a national basis, Halifax’s data shows they fell 0.3% in September but surged 0.6% in October.
“But split things by region and the market looks K-shaped. Prices in the north of England and Scotland continue to ratchet upwards, with almost no loss of momentum. Meanwhile average prices in London have settled into a pattern of steady decline. Across the capital as a whole they fell by 0.3% in the year to October, but in prime areas the falls are sharper.
“[And] average prices in the commuter belt have slipped into near stagnation – up just 0.1% across the southeast over the past year.
“The reason for this growing divergence between north and south is that amid all the uncertainty about what property taxes this month’s Budget might hold, one thing is clear – the pain will fall disproportionately on higher value homes and this puts the southeast of England squarely in the Chancellor’s firing line. The ‘broadest shoulders’ are braced for impact.
“This is driving down prices and has had a chilling effect on the number of transactions, but it hasn’t stopped them entirely.”
The October rise reported by Halifax has taken the industry by surprise.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Once again, the market is baring its teeth. Although sentiment is split between upsizers who believe prospects will improve and downsizers who think it may deteriorate as a result of Budget measures, fortunately enough buyers and sellers have confidence in longer-term prospects.
“The Chancellor may have confirmed taxes will be rising but encouragement can be taken from the Bank of England’s comments that inflation has peaked and that direction of travel for interest rates is certainly downward in the coming months.”
And Nathan Emerson, chief executive of trade body Propertymark, comments: “Any rise in house prices is a welcome sign of growing confidence in the UK housing market. It suggests that demand remains strong and that recent economic adjustments are beginning to bear fruit. This optimism also arrives at a time when the UK Government’s ambition to deliver 1.5 million new homes in England edges closer to becoming law, a potentially transformative milestone for supply.
“However, with Stamp Duty across England and Northern Ireland becoming a political flashpoint ahead of the Autumn Budget and a flurry of possible housing policy leaks, the drawn-out uncertainty risks unsettling both buyers and sellers.
“Housing is the heartbeat of the UK economy, so policymakers should be focused on delivering stability and reforms that encourage movement, investment, and growth, not hesitation.”
