UK house prices:growth in the East and South East outpaces London as the North-South property gap widens

House prices across the UK now average just under £220,000 and are rising fastest in the East of England.

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Annual house price growth in the East and the South East regions of England continues to outpace London for the fourth month in row, according to new figures from the ONS.

The latest UK house price index shows average values across the UK grew by 6.7 per cent to £218,000 in the past 12 months.

The East of England, which takes in areas from Hertfordshire to Norfolk, recorded the biggest growth, with prices rising 10.5 per cent to £279,000 on average.

Prices in the South East, stretching from Berkshire to the Isle of Wight, are up by 8.6 per cent, to £313,000.

London, which has consistently seen the highest levels of growth in the past, comes third, rising by 8.1 per cent to an average of £482,000.

The slowdown follows years of double-digit growth which has seen homes in the capital priced at more than double the UK average. As a result, increasingly stretched Londoners are looking further afield for more space and better value.

The North-South price gap
Average prices in the North and Scotland are significantly below the UK average, with only Yorkshire and the Humber seeing average property prices above £150,000.

“The North-South house price gap continues to grow as annual price inflation is 3.2 per cent in the North East, 5.2 per cent in the North West and 5.1 per cent in Yorkshire,” says Richard Snook, senior economist at PwC.

Outlook for 2017
The official government report, based on data from November 2016, is the most up-to-date insight into completed purchases, although indictors heading into January 2017 reveal a similar story.

The most recent report from Rightmove, based on asking prices of properties for sale, shows a steady start to 2017's housing market, with annual growth in the East and South East regions of England significantly outpacing London and the South West.

This is in no small part because prices are being bolstered by a lack of housing, meaning that demand continues to outstrip supply.

“2017 must be the year that we begin to tackle our nation’s chronic shortage of affordable homes head on," says Jeremy Duncombe, director of Legal & General Mortgage Club.

The government is expected to release a White Paper at the end of this month to lay out plans to help stimulate housing supply.

"Estimates suggest that between 300,000 and 400,000 homes need to be built every year to keep up with current demand, and so radical solutions need to be put forward in the forthcoming White Paper," says Simon Gerrard, managing director of Martyn Gerrard.

 


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