North/South property divide widens

The North/South divide in house price expectations has now widened to record levels, new figures show.

Households in all UK regions perceive that the value of their home rose in February, according to Knight Frank and Markit’s latest House Price Sentiment Index.

But there is a clear North/South divide in terms of the outlook for house prices, with those in Southern England most confident about future growth over the coming 12 months.

In the South East, 78.7% of homeowners were confident that prices will rise, followed by Londoners at 77.8% and those in the South West at 74.1%.

By comparison, just 60.6% of homeowners in the North East were confident and sentiment in Scotland was also subdued with just 62% of homeowners confident and 62.5% in Wales.

Gráinne Gilmore, head of UK residential research at Knight Frank, said: “The latest figures indicates that house prices are set to continue to tick up modestly in the coming months.

“The market is being underpinned by the solid economic recovery and ultra-low interest rates – which now look as if they will stay put for some time to come.

“However a key dynamic of the UK housing market is that it is highly regionalised in terms of price movements, something which is highlighted by the index.

“The average annual spread of future readings – the difference between the lowest and highest readings across the regions – reached a new high this month, with households in the South of England expecting stronger growth than those in the North.

“This signals that the regionalised nature of the market is unlikely to unwind in the short term.”