North-south divide grows

A wide gulf in prices is opening up in the housing market, according to data from the Land Registry.

The north-east and the West Midlands have been the hardest hit in the past year.

The latest monthly report from the Land Registry says London prices rose 3.2 per cent to just over £341,000 since February 2010, while the north- east crashed 7.1 per cent to £102,200 and the West Midlands saw a 5.4 per cent plunge to nearly £129,000.

Besides London, only the east of England saw an annual rise, up by one per cent to £176,300. But the falls were small in south-east England, down 1.9 per cent to £205,000, and the south-west, down 2.2 per cent to £172,700.

The gulf in prices could make it harder for many who lose their jobs to move elsewhere for a new career.

“This latest snapshot of the state of the housing market in England and Wales should carry an ‘X’ certificate,” says housing expert Henry Pryor.

“Prices continued their slide in February falling 0.8 per cent on the month before, the sixth consecutive monthly fall in a row. That’s two continuous quarters of negative growth or the accepted definition of a recession when talking about national output.”

Pryor says the big worry centres on sales levels: December 2010 saw a 30 per cent plunge on the previous December, with only 54,812 homes sold. The long-term average for the month is 62,000, and December 2006 saw more than 122,000 homes sold.

The collapse in trading is most marked at the bottom of the market.

Pryor adds: “Across the country sales of homes over £2m were 30 per cent up, in London they were 37 per cent higher. But across England and Wales, total sales in the £150,000 to £200,000 bracket were 45 per cent lower.

Ed Stansfield, at Capital Economics, says: “The market remains characterised by a north-south split.

“House prices in London remain more than 15 per cent above the lows reached in early to mid-2009, while prices in the north-east fell to a new cyclical low in February.

“Prices in the north-east are more than £4,500, or 4.3 per cent, below previous June 2009 lows, and it is likely to be among the regions most heavily affected by public sector spending cuts.”

Pryor adds: “I fear that 2011 in the housing market is going to be like a bad year at the Grand National with more fallers than finishers.”

The big losers in Land Registry statistics include: Merthyr Tydfil – down 11.6 per cent, Blaenau Gwent – down 11.5 per cent, Stoke-on-Trent – down 8.7 per cent, Barnsley – down 8.4 per cent, Blackpool down 7.4 per cent, NE Lincolnshire – down 7.2 per cent, Wolverhampton – down 7.1 per cent, Calderdale – down 6.6 per cent, Durham – down 6.2 per cent and Conwy – down 6.2 per cent.

The biggest winners were Islington, London _ up 9.4 per cent, Hounslow, London – up 7.7 per cent, Kensington and Chelsea, London – up 7.2 per cent, Hammersmith and Fulham, London – up 6.7 per cent, Redbridge, London – up 6.4 per cent, Brent – up 6.3 per cent, Richmond-upon-Thames – up 5.8 per cent, Flintshire, Wales – up 5.8 per cent, West Berkshire – up 4.5 per cent and Rutland – up 4.2 per cent.