Housing gap set to widen further
The UK’s North-South house price divide looks set to widen in the coming years, experts have suggested.
Despite uncertainty in the housing market, house prices in London and the south of England have grown.
This has been put down to a stronger market and a number of letting agents reporting a high demand for rental properties. All the while, prices in the North East and Scotland have remained unchanged, with some areas even seeing a decline, insidehousing.co.uk reports.
Now, forecasters from the Centre for Economic and Business Research (CEBR) have claimed that the gap could be set to widen even further.
According to CEBR research, house prices in London are set to rise by 2.4 per cent during 2012, whilst the North East will see a fall of 2.7 per cent. During 2013, values in the South will rise further by 2.3 per cent; whilst the North continues to fall, with a projected decline of 1.3 per cent.
The South, South East and Midlands are all earmarked for growth, with gains expected to average around one per cent. Scotland and the North East will be the only areas seeing a decline of two per cent or more.
Investors have been seeing London and the south as ‘safe havens’ for their investments, which could be set to continue for some time.
“Purchasing a property is incentivised as rents become dearer, while the buy-to-let market is stimulated as rental yields increase,” CEBR’s housing economist Shehan Mohamed told guardian.co.uk.