North-south gap in house prices starts to narrow as London dips

 

London property prices have slumped for the first time a year, with central London prices falling 1.2 per cent in November.

The figures, published today, reveal a narrowing in the north-south divide for the first time this year. But there’s slightly positive news in the monthly national housing survey from Hometrack in that year-on-year price deflation of -0.3 per cent is the lowest rate of fall since October 2010.

The average monthly price change across the country was 0.1 per cent last month, the same as the previous two months.

But the property analytics firm warned that there will be a continued slowdown of the housing market as the seasonal slowdown hits.

Richard O’Donnell, director of research at Hometrack, said there is evidence that the performance of housing markets in the north and south of the country is starting to converge.

“The gap between asking and achieved prices is closing in northern regions and this is reducing the downward pressure of pricing,” he said. “The slowdown in demand seen in the last five months has also been less pronounced in northern regions.”

Demand has fallen 4 per cent in the north compared to a 12 per cent slump in the south.

Meanwhile new research from Legal & General suggests that the market has hit bottom but won’t return to normal for five years.

Even then it will be a very different housing market, according to the report put together by the Centre for Economics and Business Research.

The study, “A New Normal in the Housing Market”, suggests that gross mortgage lending will rise to £212bn by 2017. That’s up from £142bn this year but below the £363bn seen in 2007.

It suggests there are eight key factors which will prevent the UK housing market from reverting to a 'normal' state. The weak economy, declining growth in house prices and restrictive borrowing are the three most important factors affecting households' decisions to buy.

But the weak labour market, lack of government support, Eurozone uncertainty and lack of housing being built are other factors holding back buyers.

Ben Thompson, managing director of the Legal & General Mortgage Club, said: “The past five years have been extraordinarily tough for the housing market, but good news is on the way. The hope is that following the trauma of the property crash what we will have by 2017 is not only a healthier market place but ultimately a more balanced and sustainable one.”

But things are not looking so good for renters. RightMove reckons rents will rise 2 per cent in 2013. More than a fifth of current tenants already pays 50 per cent or more of their take-home pay on rent increasing worries that renters are reaching an “affordability ceiling”.

Average rents have increased by 13.6 per cent since 2009 as demand continues to outstrip supply, RightMove reports.

Discover more property articles at Homes and Property
Property search
Property search
  • Get to the point
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk