Housing boom? Prices in the North are FALLING as they rise across the rest of the country

  • London house prices surge by 10.6 per cent year-on-year in November
  • A typical home in the capital is now worth £396,646
  • North East is the only region to see prices fall, with the average home now valued at £96,227
  • The average home in England and Wales is now worth £165,411

By Sean Poulter

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The London house boom has left the rest of the country behind, with some areas even registering price falls.

Land Registry figures show the average price in the capital was up by 10.6 per cent in November compared to a year ago, taking it to £396,646.

The average London property price has increased by £38,000 in just 12 months – the equivalent of £730 a week.

Price map: The South East and London has seen major house price gains in the last 12 months, while the North East has fallen

Price map: The South East and London has seen major house price gains in the last 12 months, while the North East has fallen

Across England and Wales, prices rose by 3.2 per cent on average over the year – but this figure masks falls in the North.

The average price in the North East was down by 1.6 per cent in a year to £96,227, while the North West was up by just 0.8 per cent to £109,692.

At the same time, there were rises of 1.4 per cent in the East Midlands and 1.6 per cent in the Yorkshire and Humber region – both below the increase in the general  cost of living.

 

Property prices in London have boomed amid an economic recovery in the city and an influx of wealthy foreigners.

They have also been boosted by a raft of government schemes designed to encourage home ownership and mortgage lending.

But the data from the Land Registry makes clear that there is no price bubble beyond the M25.

Even in the South of England, the average annual increase is just 3.5 per cent.

The upturn in the housing market is said to have boosted consumer confidence, but there have also been fears that people are being encouraged to stretch themselves too far financially to meet rising prices.

There have also been signs of ‘gazumping’ - which happens when a buyer thinks they have agreed a deal to buy a house only for someone else to step in and outbid them - being back on the increase in the capital.

The South East saw the second largest annual jump in house prices, with a 3.5 per cent increase taking typical values to £216,618.

Meanwhile, Wales recorded a 3.3 per cent annual increase in house prices, pushing them to £118,310 on average.

Surge: Prices in London rose by 10.6% annually to reach £396,646 on average

Surge: Prices in London rose by 10.6% annually to reach £396,646 on average

The East saw the most significant monthly price fall with a 0.7 per cent drop taking average prices to £177,975.

The Land Registry’s latest figures also showed how house sales have been much stronger than in the same period last year.

The most up-to-date figures available show that during September 2013, the number of completed house sales in England and Wales increased by 24 per cent to 65,378 compared with 52,870 in September 2012.

The housing market has consistently shown a strong pick-up throughout 2013 following the introduction of Government schemes such as Help to Buy, which have given mortgage borrowers with small deposits a helping hand on or up the housing ladder.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘With funding more readily available than at any time in the past five years, many buyers are finally able to realise their property-ownership dream.‘

He added: ‘This surge in demand is pushing up prices, particularly in London, where supply is already limited. Gazumping and sealed bids are becoming commonplace as relatively ordinary properties fetch a premium.

House prices: The only region to see property values drop in 2013 was the North East, which fell by 1.6%

House prices: The only region to see property values drop in 2013 was the North East, which fell by 1.6%

Business Secretary Vince Cable has warned the £130billion project, which provides lower deposits and loans, could ‘inflate the market’ and push property prices even further out of reach of young families.

Despite protestations from George Osborne, the Office for Budget Responsibility and the Institute of Directors have weighed in, claiming there is no doubt house prices will be driven up.

Branding the scheme 'mad' and 'very dangerous', Graeme Leach, chief economist at the Institute of Directors, said: ‘The housing market needs help to supply, not Help to Buy, and the extension of this scheme is very dangerous.’

And experts warn young first-time buyers will bear the brunt of the side-effects, such as unavoidable administration costs.

Solid year: House prices across England and Wales rose dramatically in 2013

Solid year: House prices across England and Wales rose dramatically in 2013

Many buyers are worried that if they don’t take the plunge now, they will be priced out further.’

Mr Harris said that locking into a fixed-rate mortgage deal could help give ‘peace of mind’ to some people who are worried about the prospect of interest rates rising.

He added: ‘There are still plenty of rock-bottom mortgage deals available, with some particularly good pricing on five-year fixed rates.’

The comments below have not been moderated.

Who want to Buy up North when the weather's bad even down South? :) :)

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"Help to buy is merely a copy of the Clinton Fannie Mae and Freddie Mac schemes to buy votes in his back yard!

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the sooner house prices collapse the better. houses should house people not be a vehicle for speculators profits!

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And NEITHER should the supposed value of a property be the basis for calculating council tax. Council tax is there to pay for services used by people therefore council tax should be levied on the number of people living in a house and using council services!

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That diagram is not giving the full picture. £300k in many parts of London won't buy you a freehold family home, it's as much as that for a basement flat in places. Whereas, £117k is sufficient for a 2/3 bed semi or a 4 bed terrace in most of Yorkshire and the Humber.

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That`s ok, i live in London. Just debating wether to buy a little place on the Cote D Azur. But never sell London house, It`s where anyone with a brain would buy.

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That`s ok, i live in London. Just debating wether to buy a little place on the Cote D Azur. But never sell London house, It`s where anyone with a brain would buy.

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Wait till you see how Scots house prices collapse if Wee Fat Eck leads the Celtic Whinge out into the night

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About time someone pointed out that this ''house price boom'' is only actually in London, the south-east and the home counties... house prices in my area of Derbyshire haven't recovered at all from the 2006 crash and, if anything, are still falling.

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And the only thing thats boosting those prices is the fact that people can get endless amounts of housing benefit to hand over to rich fat cat landlords! Stop that, stop the prices going up, easy!

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The help to buy scheme is not a bad idea in principle but it should be managed based on postcode. In areas where the property market is booming this should not be made available. How many homes in this country are empty?? We need to make better use of the housing stock we have in all areas over the country and stop focussing on London's booming market.

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This is because we have a false economy

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Absolutely correct and it will 'correct' itself, unfortunately it's likely to be in a catastrophic way.

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