While house price indices such as Nationwide, Halifax and Hometrack have all seen national price growth of 1.1 per cent, 0.4 per cent and 0.3 per cent respectively in June, there is a greater disparity between the different regions of the UK.
Neil Johnson, head of PR and policy at the Building Societies Association (BSA), commented: “The growth in London and the South East is still high and this is distorting the national figures and local housing problems are starting to show themselves. I think in these areas, people are having to be more careful when they are buying a home as affordability has been stretched.”
According to Halifax, house prices in Wales dropped 2.8 per cent in June, while the West Midlands and the South West saw respective drops of 1.1 per cent and 0.4 per cent.
Mark Sismey-Durrant, chief executive of Heritable Bank, believed the figures were showing the impact of recent interest rate rises.
“London has its own micro-economy so you have to treat it as a special case. Lots of foreign money is flooding in at the top of the market and this is filtering down to create a good feeling. However, if you look at areas which have gone up more radically in the last few years and where people have had to borrow more to buy a home, you are seeing interest rates biting.”
Paul Fincham, senior media relations officer at Halifax, added: “There has been a differing regional picture for some time. If you look at the annual growth in England, Greater London is double-digits but everywhere else is single-digits now.”
