The recent surge in property prices in the North, dubbed the “Burnham bounce,” contrasts with a decline in southern regions, according to latest data. Experts attribute this trend to the advocacy for the North by newly appointed PM, Andy Burnham, which has bolstered confidence in the housing market. Lloyds Bank data reveals that house prices in northern areas of England experienced the strongest growth, with the North East and North West witnessing price increases of 2.8% and 2.1%, respectively.
Meanwhile, southern regions like the South East and Greater London saw declines of 2% and 1.3% in house prices, respectively. The market shift is attributed to factors such as Andy Burnham’s leadership, favorable weather conditions, and England’s recent success in the World Cup, which have collectively boosted optimism nationwide. Nicholas Finn, from Garrington Property Finders, noted that the anticipation of job creation and government investment in the North has positively influenced market sentiment, leading to an upward trajectory in prices.
However, the oversupply of homes in southern areas has resulted in fewer serious buyers, leading to price reductions and preemptive cuts by sellers to attract interest. The average home value in Greater London has dropped by approximately £6,000 in the past year, while prices in the South East have decreased by around £7,100. In contrast, prices in the North West have surged by over £5,500 on average, with the North East seeing an increase of more than £5,200. The affordability gap between northern and southern regions remains a significant concern.
Overall, UK house prices remained stagnant last month, with mortgage rates slightly increasing amid global economic uncertainties. Notably, Northern Ireland witnessed the highest price growth at 7.4% year-on-year, followed by Scotland at 3.6% and Wales at 1.6%. Lloyds’ Amanda Bryden mentioned that despite economic uncertainties, the housing market has remained steady, with prices fluctuating within a narrow range over the past two years.
Looking ahead, market stability is expected to continue, influenced by mortgage rate adjustments based on inflation forecasts and household confidence. Recent increases in mortgage rates by lenders, despite the unchanged base rate, indicate a cautious approach in response to potential inflationary pressures. The future trajectory of the housing market will depend on how mortgage rates adapt to inflation expectations and consumer confidence levels.
