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Southern house prices show signs of life

Diane Coyleeconomics Correspondent
Tuesday 11 April 1995 23:02 BST
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There are signs that the North-South divide in house prices is reopening, according to figures published today by the Halifax Building Society.

In the past year house prices have fallen in all regions from the Midlands northwards. But they have risen in the south of England and in Northern Ireland. Gary Marsh, a Halifax spokesman, said: ``The South suffered more than the North and now it is recovering a bit more.''

Rob Thomas, analyst at the City securities firm UBS, said: ``The regional divide will continue to open up over the next few years.'' He said the gap between southern and northern house prices was currently the lowest on record. Southern prices always fell faster in the housing market downturn and rose further in the recovery.

The Halifax findings agree with recent research published by Shelter, the housing charity. Julian Birch, editor of Shelter's magazine Roof, said a short-term surge in house prices in southern counties such as Oxfordshire and Avon was likely. These were the areas seeing the steepest falls in unemployment and repossessions.

According to Halifax, the average house price in Yorkshire and Humberside, at £50,733, is slightly below its level in the first quarter of 1993, which is usually thought of as the nadir of the housing slump. Prices there have fallen by 3.5 per cent since the first quarter of last year. They are down nearly 5 per cent in the North.

East Anglia and the South-east have seen the biggest one-year increases, with prices up 0.5 and 1.6 per cent respectively. Their gains have been concentrated in the latest quarter.

Prices in the South-east rose by 1.2 per cent and East Anglian prices by 1.6 per cent in the first three months of this year.

The biggest quarterly falls were in Yorkshire and Humberside, down 1.2 per cent, and the South-west, with a 1.3 per cent fall. However, prices in the South-west have edged up 0.2 per cent in the past year.

Mr Marsh said the Easter house-buying season would be critical. If the number of transactions did not pick up at all, there was little hope of a general rise in house prices this year.

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