Currently viewing the tag: "North – South"

The much debated north-south divide could hardly be more apparent than when it comes to housing. It’s widely accepted that England has an almost two-speed housing market: in the south east, real estate is as much an investment as a home, creating a frenzy of competition between investors, foreign buyers, locals and commuters that keep house prices high. Houses further north can be a fraction of the cost, with prices dropping, more homes standing empty and high levels of housing debt.

The natural conclusion might be that the lower prices mean that housing in the north is more affordable. In reality, affordability is about the money you take home each month versus the cost of your home. The money in your pocket is most often determined by the local jobs market and average wages, which can be totally out of step with the cost of housing in a particular region. On a more local scale again, the picture can become even more complicated – a recent IPPR report into housing in Bradford, for example, found that those in the poorest and cheapest areas of the city spent proportionately more of their income on rent.

Shelter has just released new research showing where the nation’s repossession ‘hotspots’ are – those areas where the highest proportions of homeowners are at serious risk of losing their homes. We find huge variation across the country, with the greatest number of hotspots clustering around the North West and the North East, and a couple of stand out areas in the south, including Barking and Dagenham, Lewisham and Thurrock.

Click here to explore the interactive map of hotspots from Shelter.

Of the top ten hotspots nationally, five are in the north west. What does this tell us? Firstly, the cluster of repossession risk hotspots in the north reflects economic conditions, to some extent. Home repossessions are often triggered by job loss or other loss of income, and our analysis shows that unemployment is higher, and has risen faster, in the areas where risk of repossession is highest.

More recently this has been exacerbated by the ongoing squeeze on household finances. Housing costs take up a large chunk of most people’s take-home home pay. We know that many families have made huge sacrifices – including cutting back on food and fuel – to keep up their mortgage payments. But ultimately if your pay isn’t rising and the cost of everything else is, it’s difficult to keep budgets on track.

The high cost of housing affects all of us. While prices might be most out of control in London, Shelter’s research clearly shows that the northern market is dysfunctional too, with worryingly high numbers of households falling behind on their mortgages and facing the threat of repossession.

Source: Guardian.co.uk

The North-South divide in UK residential property prices look set to widen further by the end of 2013, according to a new study by the Centre for Economics and Business Research (CEBR).

London property prices are expected to grow by up to 2.4% in 2012, while properties in the North-East will see values fall 2.7%, as the capital remains relatively unharmed by the wider impact of the double-dip recession.

Wales, the North-West, Scotland and the North-East will see the values of their properties fall in each of the next two years. By contrast, London and the South East will grow by at least 2% in both 2012 and 2013.

London remains a safe haven for wealthy overseas investors. But this does little to protect other areas of the UK where demand from overseas investors is slight.

Even low interest rates and a lack of suitable housing supply have failed to prevent property slumps in other regions.

The UK average house price change is expected to be an increase of just 1%– an improvement on last year’s 1.5% fall, but way down on the 2007 pre-crash boom of 11%.

Douglas McWilliams, the chief executive at CEBR explains: “Demand in the London market remains resilient with the ongoing Eurozone drama piquing international interest in the capital. Furthermore, we can expect an abundance of affluent French citizens shopping for London homes if President [Francois] Hollande’s proposed 75% top rate of income tax is enacted.”

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