Hackney hits the top spot

The north south divide is not as straightforward as it sounds
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The Independent Online

The dawn of a new age has finally proved our childhood predictions wrong. Spangly space suits haven't replaced clothes and houses not satellite pods are still the norm. Yet another twentieth century trend seems set to continue: Property prices and the state of the market remain a national obsession not least with agents and developers around the country as they predict the year ahead.

The dawn of a new age has finally proved our childhood predictions wrong. Spangly space suits haven't replaced clothes and houses not satellite pods are still the norm. Yet another twentieth century trend seems set to continue: Property prices and the state of the market remain a national obsession not least with agents and developers around the country as they predict the year ahead.

Hugh Dunsmore-Hardy, chief executive of the National Association of Estate Agents, offers hope to vendors who don't live in "hot spots": "I think we'll see little difference in the market over the next year. There'll be some price growth which will slow down by the end of the year and the strength in the south will spread to other parts of the UK."

Dampening activity in the south was probably the Bank of England's intention last week when it lifted its key base rate by another quarter per cent to 5.75 per cent signalling an increase in mortgage bills. Analysts predict more raises will take the base rate up to 7 per cent this year. How this affects what could be described as a divided market is debatable.

Mr Dunsmore-Hardy believes that the year ahead may be less fruitful for parts of the country which haven't seen London's "bullish growth": "It's not a universal picture by any means. Prices in the south are around three times higher."

Much is made of the north south divide but scratch the surface and a complex picture emerges. A recent report from the Halifax bank showed property prices rose by around 14 per cent in 1999 with London leading the way with 29 per cent.

Nationwide's report, issued hours before the rate decision, showed highest increases in Hackney where, despite its record for the second worst unemployment problem in the UK, prices rose by 37 per cent.

Winkworth franchisee Brenda Hobday ascribes Hackney's success to the over pricing of areas like more fashionable Islington: "It's good value for money and we've got lots of Victorian stock which people seem to want. There's a strong creative and artistic community but many people who live here don't work here."

Hackney may hold records for property values and unemployment therefore blurring the north south divide debate but what is the picture like further north? Manchester-based agent Nick Bookbinder of ABC Estates says: "It's a patchy market up here. Prices are racing ahead in good areas but in others it's still 'buy two get one free'." Mr Bookbinder is currently struggling to get £2,000 for a terrace in Salford: "If someone buys it then they've got to have someone living there while they do it up otherwise they'll lose the lot."

Does he fear interest rate rises will further depress the market? "No, hopefully it will slow things down. I want steady growth not peaks and troughs but I'd like to see the Government take account of the north south divide. In south Manchester prices are still moving but they must take account of the whole economy not be led by the south east."

Mr Bookbinder also believes that stamp duty increases will benefit the market as a whole: "I'd like to see them attack the top end but long term I don't think the market is as volatile and interest rates will stay in line with Europe. Even if interest rates stay low remember that in London you've got continuity of employment, up here people are still chary."

No takers for a Salford terrace but a nearby development attracting interest in central Manchester illustrates the polarity even within a local market. Developers Nicholson Estates are currently marketing the 'century buildings' where prices start at £108,000 for a one bedroom apartment rising to £1,000,000 for a penthouse, a first for Manchester in this price bracket.

A similar picture emerges in the North East where Teesside agent Michael Poole sees "a contrasting market within": "The last year has been good in the number of transactions but little increases in price, roughly around 8 per cent. Here we've got two markets operating within a mile of each other"

Mr Poole's main problem is a lack of good quality properties in the more popular areas: "People aren't putting their own properties onto the market until they've found somewhere that they want to buy."

Like Mr Bookbinder, Mr Poole sees a different problem within inner city areas: "Recent low interest rates have meant that first time buyers aren't buying where traditionally they might have done. They can now afford £55,000 rather than £25,000 so they bypass the city. Investors buy there resulting in a transient population with a lack of community spirit."

The Government dismisses the north south divide as irrelevant but does want stability in the housing market. Plans for housing reform will become clearer in the Spring when the interim results of the Bristol pilot scheme, where volunteers are testing the benefits of sellers' packs, are announced.

Other plans for the year include leasehold reform and a housing green paper. A recent proposal by the Lord Chancellor means that homeowners will soon be able to find out how much neighbouring homes sold for as prices paid will now be entered onto the Land Registry.

How do leading UK developers see the market? Countryside's Guy Lambert wants to see interest rate rises "take the froth out of the market place" but calls the north south debate "overplayed".

"The north west hasn't seen anything like the peaks and troughs of the south east but the right development at the right price still sells nicely. Look at pockets of Cheshire where there's a lot of money."

In contrast to some of his colleagues, Mr Lambert does not want to see stamp duty rises: "If the Government further pushes the top end it could threaten inner city regeneration and put a few schemes in danger causing some people to think again."

Let's hope not or a unified housing market may have to wait until the next century.

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