North-South house price gap widens

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The average cost of a home in the South was £265,921 at the end of September, 68% more than the price of the average home in the North at £158,636, according to Britain's biggest mortgage lender Halifax.

The group said the gap was continuing to widen after reaching a low of 56% in the first quarter of 2006, following four years of continuous narrowing due to the cost of a home rising more quickly in the North.

But Halifax said in the year to the end of September, three of the four regions that make up the South had seen double digit house price growth, with prices rising by 18.6% in Greater London, 13.7% in the South East and 11.1% in East Anglia. Prices also rose by 8% year-on-year in the South West.

By contrast northern regions were more likely to see single digit growth, with prices edging ahead by just 5.2% in the North West, 5.4% in the North and 4.7% in the West Midlands.

Northern Ireland, which is classed as being in the North, and Scotland both bucked this trend as they saw annual house price inflation of 29.1% and 14.2% respectively.

Halifax said despite house prices growing more quickly in the South during the past year, increases in the North had been nearly double those in the South during the past five years.

It said the average cost of a home had risen by 97% in the North since the third quarter of 2002, compared with a 53% increase in the South.

As a result, the difference between the cost of the average home in the North and one in the South was now only 68%, compared with 115% five years ago.

House prices increased in most regions of the UK during the third quarter of the year with Greater London seeing the biggest gains at 2.3%, followed by the South East at 1.8%.