At record low the gap of house prices between weakest and strongest performing regions
The second quarter of 2017 saw further convergence in regional price growth. The gap between the weakest and strongest regions (in terms of annual price change) fell to just four percentage points – a record low, according to Nationwide House Price Index.
As Nationwide reported East Anglia was the strongest performing region, with average prices up 5% year-on-year. London saw a notable slowing in growth to 1.2% and was the second weakest region in Q2, just above the North (1.1%).
Annual price growth in Northern Ireland was stable at 3.8%. Scotland saw a slight softening in growth to 1.7%, while Wales was similar to last quarter, at 1.4%.
Average house prices in England fell by 0.3% during the second quarter and were up 2.8% over the last 12 months.
Regions over the last 12 months
|Annual % change this quarter||Annual % change last quarter|
|Yorks & H’side||£151,947||2.3%||2.5%|
For the first time in eight years, price growth in Northern England (West Midlands, East Midlands, Yorkshire & Humberside, North West and North) exceeded that in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia). Northern England saw a 3.3% year-on-year increase, while in the South prices were up 2.6%.
Regional growth rates may have converged, but there are still significant disparities in price levels. This is particularly apparent when looking at prices relative to their 2007 peak. For example, prices in London are 55% above 2007 levels, while those in the North, Yorkshire & Humberside and North West are still lower than their 2007 peaks.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“There has been a shift in regional house price trends. Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country. In Q2 the gap between the strongest performing region (East Anglia, which saw 5% annual growth) and the weakest (the North, with 1% growth) was the smallest on record, based on data going back to 1974. Nevertheless, when viewed in levels, the price gap between regions remains extremely wide.
“London saw a particularly marked slowdown, with annual price growth moderating to just 1.2% the second slowest pace of the 13 UK regions and the weakest pace of growth in the capital since 2012.