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South widens property price gap with the rest of Britain: Value of London home up 28,500 in a year but falling in seven other regions
01:57 GMT, 21 December 2012
Britain's housing market has ‘a stark North-South divide’, with house prices rising in London and the South but falling across the rest of the country, a report said yesterday.
It showed that the value of homes in London has jumped by an average of 28,500 over the last year, but prices have been dropping in seven out of 11 regions.
As a result, a typical home in the capital ‘earned’ more than the average full-time worker in Britain on a salary of 26,500.
For sale: Britain's housing market has 'a stark North-South divide' with house prices rising in the South and falling across the rest of the country
The property website Zoopla.co.uk, which published the research, said there is a ‘stark contrast between different regions around Britain’.
Since December 2011, values have jumped in London, the South West, the South East and the East.
But they are falling in the West Midlands, Scotland, the North West, the North East, East Midlands, Yorkshire and the Humber and Wales.
A spokesman for Zoopla.co.uk – whose shareholders include A&N Media, a division of the Daily Mail and General Trust – said: ‘There is a stark North-South divide in housing market performance over the year.
‘For the southern half of the country, 2012 was a year of property price growth.
‘For those in the other half, the picture was far less rosy.’
While many homeowners in the South can easily sell their homes, many others face a battle to find a buyer
While many homeowners in the South can easily sell their homes, many others in the rest of the country face a battle to find a buyer.
Many are forced to repeatedly drop the asking price, or are trapped in their homes after falling into negative equity which means their mortgage is larger than the value of their home.
Yesterday the Council of Mortgage Lenders warned the market will remain in the doldrums for two more years.
It predicts that just 950,000 homes will be sold, around 100 families a day will face repossession, and net lending will be just 10 per cent of what it was at its peak.
Net lending is the total amount of money handed out by banks and building societies, minus the amount of money paid back by customers.
During the boom years, 1.6million homes every year were sold in the UK and net lending, at its peak in 2006, hit 110billion.
The CML predicts net lending will be just 12billion in 2013
Its annual forecast, published yesterday, admits there will be ‘a discernible although not dramatic’ improvement next year despite the Bank’s radical ‘Funding for Lending’ scheme.
Under this, banks and building societies can borrow an unlimited amount of money for as little as 0.25 per cent as long as they maintain, or increase, their lending.
The CML said: ‘Lenders perceive today’s borrowers as being at a significant disadvantage compared with the past.’