A recently published report by the Smith Institute highlights the ‘great house price divide’.
The report shows how house prices in England and Wales have changed in 179 areas over the past six years. Whilst in inner London prices have risen by more than 30%, in most other areas prices have fallen sharply – by 15% in the Midlands and by over 20% in the North. Across the country average prices are down by £15,000, placing some homeowners in negative equity.
The report illustrates the house price gap between London and elsewhere. Since 2007 average house prices in England and Wales have fallen to around £166,000. In London they have risen to almost £400,000. The gap is widening as London’s share of the country’s property wealth increases.
The report also shows how the personal wealth of those who have lower value properties has been reduced and concludes that the rapid divergence in house prices constrains mobility, deters investment in new homes and local growth, risks a London-centric housing bubble and exacerbates wealth inequalities.