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House prices: the North-South divide

House prices- the North-South divide
13 December 2019

By UKinsuranceNET In News

In the course of the next five years, house prices in the northwest of England are likely to outstrip increases in London, according to a report in Property Industry Eye on the 14th of November, citing predictions by estate agents Savills.

Across the UK as a whole, Savills predicts a return to steady growth in average house prices – rising by 0.5% by the end of the current year, 1% in 2020, and 3% for each of the years until 2024, representing an increase over the 5-years of 15.3%.

By that reckoning, the average house price in the UK will have reached £266,000 by the year 2024.

In both the northwest and in Yorkshire, however, prices are predicted to grow more markedly – with the former achieving average increases of 24% during the same period and Yorkshire 21.6%. Also topping the national average in house prices are Scotland at 20% and Wales at 18%.

Illustrating the North-South divide, prices are expected to rise by only 11% across the South and East of England and in Greater London by a mere 4%.

As is necessary for such relatively long-range projections, Savills’ study made several assumptions. Namely that:

  • there is no significant shift in housing policies following the current general election;
  • Brexit is completed in an orderly manner before the end of 2020;
  • the Bank of England base rate increases to 2% by 2024, so that mortgages become less affordable and house prices rise; and
  • the UK avoids recession.

It remains to be seen, of course, just how accurate these predictions will be.

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