Tale of two halves as North suffers more than South

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The Independent Online

Britain's north-south divide is turning into a chasm as a shuddering recovery and steep cuts to public spending hit the North far more than the South.

Two sets of figures to be published today, covering business failures and house prices, will again show that the economic picture in the two halves of the country is starkly different.

Begbies Traynor, the insolvency specialist, will report a "material increase in problems in the past quarter across the North East, North West, Yorkshire, the Midlands, the East of England and Wales compared to decreasing distress in London and the South East".

Against a UK average of 2 per cent, the number of businesses facing both significant and critical financial distress in the past quarter fell by 6 per cent and 3 per cent, respectively, for London and the South East. But all other regions in England and Wales saw rises.

And by far the hardest hit was the North East, with a 19 per cent rise in business distress, followed by the North West with 12 per cent. Yorkshire, the Midlands, Wales and the South West saw increases of 10 per cent.

At the same time the property website Rightmove will report the widest gulf in average asking prices for houses that it has ever recorded, with asking prices in the South in October averaging £336,743, more than double the figure in the North (£164,347). The national average asking price was £239,672. And while there was a 2.8 per cent rise in asking prices nationwide, Rightmove says this masks what it calls a "two-tier UK property market".

The website will say that asking prices in the south rose by 4.7 per cent; in the north they fell back by 0.7 per cent to levels not seen for six years. It will also indicate that the highest level of mortgage approvals since November 2009 points to a slight easing in Britain's mortgage famine. However, it will warn that public sector job cuts will continue to impact on prices in the North.

19 per cent: The rise in business distress levels in the North East in the past quarter