Yorkshire recorded the highest rise in house prices in England for the second quarter in a row, according to the latest Nationwide index, pushing the average price in the region to £188,457, which is £20,641 higher than the same period last year.
Prices from the three months to September 2021 were up 12.3% year-on-year. The North West was a close second with an 11.4% rise. London was the weakest performer, with annual growth slowing to 4.2% from 7.3%. UK wide, Yorkshire was the third in the house price growth table with Wales topping it with 15.3% year-on-year growth and Northern Ireland second, with 14.3%.
Robert Gardner, Nationwide’s chief economist, said: “Price growth in northern England continued to exceed that in southern England.” He added: “House prices have continued to rise more quickly than earnings in recent quarters, which means affordability is becoming more stretched. Raising a deposit remains the main barrier for most prospective first-time buyers. A 20% deposit on a typical first-time buyer home is now around 113% of gross income – a record high.
“Due to the historically low level of interest rates, the cost of servicing the typical mortgage is still well below the levels recorded in the run up to the financial crisis. However, even on this measure, affordability is becoming more challenging. For example, if we look at typical mortgage payments relative to take home pay across the country, it is notable that in the majority of UK regions, this ratio is now above its long-run average.”
As for the future of house prices, he said: ““As we look towards the end of the year, the outlook remains uncertain. Activity is likely to soften for a period due to the stamp duty holiday expiring at the end of September, and underlying demand is likely to soften around the turn of the year if unemployment rises as government support winds down, as seems likely.
“But this is far from assured. The labour market has remained remarkably resilient to date and even if it does weaken, there is scope for shifts in housing preferences as a result of the pandemic – such as wanting more space or to relocate – to continue to support activity for some time yet.”