The recent surge in property prices dubbed the “Burnham bounce” has extended to the real estate market, with the North experiencing growth while prices in the South decline. Analysts attribute this trend to the North being championed by new PM Andy Burnham, which has positively impacted the housing market. Data from Lloyds Bank indicates that the most substantial house price increases in England are concentrated in northern regions.
In the North East, prices have risen by an average of 2.8%, reaching £182,488, while the North West has seen a 2.1% increase to £247,836. Conversely, southern England continues to struggle, with the South East experiencing a 2% decline to £381,146, and Greater London recording a 1.3% drop to £533,930.
Andy Burnham’s appointment as Labour PM, along with other factors like the weather and England’s World Cup performance, has contributed to a more optimistic national sentiment. Nicholas Finn from Garrington Property Finders highlighted the positive impact of potential job creation and government investments in northern areas on housing prices.
However, the South faces challenges due to an oversupply of homes leading to fewer serious buyers, resulting in price reductions and preemptive cuts by sellers to attract interest. Lloyds’ data suggests that average home values in Greater London have decreased by nearly £6,000 in the past year, while prices in the North West and North East have seen average increases of over £5,500 and £5,200, respectively.
Overall, UK house prices remained stable last month, with Northern Ireland showing the strongest growth at 7.4% year-on-year. The national average price stands at £299,253, with varying growth rates in Scotland, Wales, and Northern Ireland.
Despite recent mortgage rate increases, the Bank of England has maintained the base rate, citing potential inflation due to global uncertainties. Amanda Bryden from Lloyds expects the housing market to remain steady, closely influenced by mortgage rates, inflation outlook, and household confidence.
In London, concerns are raised about the impact of proposed policies like the mansion tax, whereas in the North, wage growth outpacing property price inflation is seen as a balancing factor. Property tax changes are also becoming a significant consideration in decision-making, leading to a stalemate between buyers and sellers.
As market dynamics evolve, the interaction between property prices, mortgage rates, and economic conditions will continue to shape the housing market in the coming months.