Recession boosts fortunes of the North: Regional Trends Survey shows drop in South-east house prices. David Nicholson-Lord reports

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The Independent Online
THE recession has proved a 'great leveller', reducing the North- South divide and benefiting traditionally poorer parts of the United Kingdom, according to the latest issue of Regional Trends, published today.

Rising unemployment coupled with a drop in house prices and falls in investment have hit the wealthier South worst. Regions such as the North, the North-west and Yorkshire and Humberside have fared much better.

According to the Central Statistical Office's yearly diagnosis of regional social and economic performance, the South-east's share of gross domestic product, which peaked at the end of the 1980s, has fallen in two successive years, from 36.1 per cent in 1990 to 35.4 per cent in 1992 - the equivalent of nearly pounds 4bn.

By contrast, the North's share of GDP rose from 4.7 per cent to 4.9 per cent between 1990 and 1992 and Yorkshire and Humberside's share rose from 7.8 per cent to 8 per cent. During the second half of the 1980s both regions' shares had declined.

The CSO figures show that the South-east, East Anglia and the South-west continued to bear the brunt of the recession. House prices in the South-east fell by more than 20 per cent from 1989 and the South-west and East Anglia had falls of 24 and 22 per cent respectively. Property prices rose in the North, Yorkshire and Humberside and the North-west, however - by 19, 10 and 12 per cent respectively.

Jenny Church, editor of Regional Trends, described the recession as a great leveller and said the erosion of regional differences detected last year was continuing.

Mortgage problems have hit the South-east worse than anywhere else. Of 118,000 actions for repossessions last year, 49,000 were in the South-east, more than 21,000 of them in Greater London.

Historically depressed areas have also weathered the growth in unemployment rather better. Joblessness in the South-east has leapt from 3.9 per cent in 1990 to 10.2 per cent last year, a higher figure than the East Midlands, the South-west and East Anglia.

In the North, unemployment increased much more slowly, reaching 11.9 per cent against 9.8 per cent 1989. Areas such as the Isle of Wight, with an unemployment rate of 14.5 per cent, almost equalled Merseyside and Cumbria with rates of 15.1 and 15.3 per cent respectively.

However, the South-east remains the only UK region wealthier than the European Union average. Taking 100 as the GDP norm, the UK scores 98 and the South- east 117. Northern Ireland, at 74, is the poorest. The region with the highest GDP is Hamburg in Germany with 209.