The new North-South property price divide

Homes lose money in South East for first time in 8 years

FOR decades, they have made far more from their bricks and mortar than anyone else in the country.

But now home-owners in the South East are losing money on their homes – after prices there fell for the first time in eight years.

Meanwhile, properties in the North gained in value, according to the latest official figures.

The average South East property’s value fell 1.8 per cent during the year to February, dropping to an average of £315,000.

It was the first fall since 2011 and the biggest drop since 2009.

London prices fell by 3.8 per cent to an average of £459,800, led by drops of 19.4 per cent in the City of Westminster.

The fall helped slow down the UK’s property market as a whole.

The average British house price climbed by just 0.6 per cent – the lowest rate since September 2012 – to reach an average of £226,234.

Growing evidence of a new regional divide saw the North West emerge as the best performing English region, with growth of 4 per cent to an average £163,758. Next best was the West Midlands, with a rise of 2.9 per cent to £196,152.

Jonathan Hopper, of estate agent Garrington Property Finders, said: ‘At a national level, it is no longer a question of speed bumps and a gradual slowdown – the market is instead stuck in neutral with the handbrake on.’

John Goodall, of buy-to let mortgage lender Landbay, said: ‘You don’t need to be a housing analyst to see that falling prices in London are acting like an anchor, dragging overall house price growth down across the country. While issues with affordability and supply remain, political and economic uncertainty linked to Brexit is more acute than ever.’

Jamie Durham, an economist at PwC, said Brexit uncertainty is holding prices back in London and the South East. He added: ‘Elsewhere in the UK, however, house prices continued to rise.’

It came as inflation as measured by the consumer prices index held steady at 1.9 per cent. The average wage is rising by 3.5 per cent, meaning pay packets are buying more each month.

This extra income should make it easier for families to afford their mortgage payments. And because inflation remains below the 2 per cent Bank of England target, an increase in interest rates remains unlikely – so mortgage costs should not rise any time soon.

Russell Galley, managing director of Halifax, said: ‘While the slowdown in house price growth may not be welcomed by homeowners, the narrowing gap between prices and wages should improve mortgage affordability.’

A No Deal Brexit could cost households almost £500 a year in higher prices, add £1,500 to the cost of a car and wipe £70,000 off the average house asking price, it was claimed yesterday. The introduction of tariffs on imports and an expected fall in the value of the pound would lead to inflationbusting increases in the cost of essentials such as clothing, food and fuel.

It is claimed this would translate to £186 extra on food and £115 on clothing and shoes alone, according to research by a team from the money-saving website www.Codes.co.uk. In a worst- case scenario, clothing would go up by 11 per cent, food by 10 per cent, fuel by 8 per cent and alcohol by 5 per cent. The figures are based on reports from industry experts, retail analysts and the Bank of England.