Mini-boom sparks rise in house prices

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The Independent Online

The North-South house price divide, which had shrunk, during the recent housing lull, has widened in June for the first time in four years, a survey shows today.

Rightmove, a property website, said a southern mini-boom was behind this month's jump in prices. The asking price of the typical home on the market rose 0.8 per cent to take the annual inflation rate to 6.4 per cent, from May's 5.9 per cent.

Southern house prices have risen 9.4 per cent over the past year compared with 2.7 per cent in the North. The gap between the two halves of the UK is widening for the first time in four years, it said.

Although the figures provide ammunition for the "hawks" on the Bank of England's interest rate committee, Rightmove warned an interest rate rise would hit northern regions hardest.

While prices in London surged 2.1 per cent this month to a record average of £315,224, the average price in the North-east and Cumbria slumped 1.8 per cent. Prices in that region have stagnated over the past year.

Miles Shipside, its commercial director, said: "Demand and transaction levels are still healthy in the North ... but any upward move in rates could put this in jeopardy."

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