A review of trends in the housing market has highlighted a swing in the rate of house price growth between the North and South.
Research conducted by international property consultancy FPD Savills found that, based on rises over the first half of the year, the North-South divide has been reversed. Factors such as economic growth, consumer confidence and affordability are limiting house-price growth in Greater London.
Richard Donnell, director at FPD Savills Research, said: ‘Growth in London over the first six months of 2003 was 3%, while values in the prime London market have fallen by 5% as a result of the Iraqi war and job cuts in the City of London.’
Projections for slower annual growth in real incomes of 2.7% over the next five years, compared with 3.6% over the previous five, will only exacerbate this divide. However, house prices in London and the South East are still predicted to stagnate rather than fall, with a reduction in turnover cited as the key factor.
Savills is predicting average values will rise by 10% over the year.