Public sector job cuts push down house prices in North

Southerners are typically putting their homes on the market for £336,743, compared with £164,347 in the northern regions, creating fears that a “two-tier twist” could be hampering more widespread growth in the market.

The £170,000 chasm is the largest in monetary terms since Rightmove’s records began in 2002.

The report pointed out that areas grouped as the “North” for the survey have been badly hit by unemployment, so job concerns, particularly in the public sector, will be pushing house prices down.

The monthly index revealed an overall 2.8 per cent increase in asking prices, a jump of £6,533 from mid September to reach £239,672 in mid October.

But this rise was driven by the South, including London, the South East, the South West and East Anglia, which experienced a 4.7 per cent upsurge overall.

Meanwhile, the North, which for the purposes of the survey included Wales, the West Midlands, East Midlands, Yorkshire and the Humber, the North West and the North of England, fell back by 0.7 per cent in the space of a month, to levels first achieved more than six years ago in May 2005.

Properties in some of the South came onto the market at an all-time high. In London, the typical price was £450,210 – 2.6 per cent higher than a previous record set in June.

Kensington and Chelsea was the best-performing area of the capital, with prices up 6.6 per cent in a month to typically reach £1,917,895.

In the South East people were asking £317,055 for their properties – up 0.2 per cent on the previous high achieved in May 2008. Compared with the start of the credit crunch four years ago, prices of properties coming to market have risen by 5.4 per cent in the South but tumbled by 9.6 per cent in the North, Rightmove said.

Last week, the Council of Mortgage Lenders reported a seven per cent rise in the number of loans for house purchase, showing “welcome signs of life”.

Mortgage lenders are offering record low deals as the Bank of England’s base rate remains at 0.5 per cent.

Rightmove director Miles Shipside said: “Wider access to mortgages and rising asking prices are early signs of increasing demand, giving homeowners some grounds for hope of a market recovery.

“However, the reality is that there is further evidence of a two-tier twist which is dogging the return to more widespread liquidity in the housing market.”

Mr Shipside said: “If prices are perceived to be rising then buyers are afraid that their dream home could move out of their reach unless they act quickly. These drivers of higher volumes of transactions and more buoyant conditions are more prevalent in the South.”

Rightmove’s monthly report is based on asking price listings on its website.