RICS’ June house price survey showed London and the South East experienced the sharpest house price increase in over four years, widening the gap between the two regions after a period of convergence.
This mini-boom, fuelled by a strong financial services sector, created the largest gap between the North and South the organisation has ever reported.
Ian Perry, spokesperson for RICS, said: “Evidence suggests that the property market is once again seeing a North-South divide. A strong financial services sector has transformed London into a property rich ‘city state’. Economic divisions used to be characterised by unemployment and economic decline but are now characterised by the difference in house prices. London has become a property kingdom created by finance.”
Overall, 28 per cent of chartered surveyors saw a rise in property prices in June, up from 21 per cent in May.
Supply issues may have been a factor in this, with the number of new properties coming onto the market falling for the first time since October 2005.
However, the World Cup had little impact in RICS’ eyes, with enquiries and newly-agreed sales both showing a slight rise, and jitters in the wider economy, with volatile stock markets and rising unemployment, also failing to put customers off.
While the figures showed a growing North-South divide, Neil Johnson, PR and policy manager at the Building Societies Association (BSA), warned affordability was not just a Southern issue.
“House prices have been rising in the South East but the figures make it look like affordability is just a South East problem. There are still affordability issues across the rest of the country which need to be addressed.”
