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House prices: the North-South divide

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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.