North/South property divide reaches widest level to date

House asking prices in the south of England have reached more than double those in the North, creating the widest price divide to date.

According to Rightmove’s House Price Index, new sellers’ asking prices have risen by 2.8% (£6,533) over the last month across the UK.

However, this figure masks a two-tier property market in which asking prices in the south rose by 4.7% to set new records, while prices in the north fell 0.7% month-on-month, to levels first achieved in May 2005.

While the average property in the North of the country costs £164,347, the average in the south is more than double that, at £336,743.

Mortgage approvals reached a two-year peak in the month from September to October, hitting their highest level since November 2009 and easing the burden for those seeking low-rate deals in the deposit-rich south.

Miles Shipside, director of Rightmove said: “Wider access to mortgages and rising asking prices are early signs of increasing demand, giving home owners some grounds for hope of a market recovery. However, the reality is that there is further evidence of the two-tier twist which is dogging the return to more widespread liquidity in the housing market.

“While those in the affluent South may have cause to celebrate their prices being well up on this time last year, prices in the North continue to go backwards, leaving the widest price gap ever. For the average asking price of a property in the South you could now buy two average properties in the North and still have enough change left to buy new carpets and curtains.”

In London and the South-east, property is entering the market at all-time price highs. London’s £450,210 average is 2.6% higher than the previous record set in June this year, while the £317,055 seen in the south east is 0.2% up on the previous peak in May 2008.

Comparisons with the market as it was at the start of the credit crunch make grim reading for Northerners. Four years ago, asking prices in the North were 9.6% higher, while in the South they were 5.4% lower.

Over the last year, sellers in the northern half of the country have reduced their asking prices by 2.6% on average, while those in the South have put them up by 3.9%.