The house prices gap between the north and south of Great Britain will narrow in the next five years.
However, prices are expected to rise 13% by 2026.
The north-south gap in house prices will narrow in the next five years; it was forecast this week, with some regions seeing increases of almost 19% during the period.
Property firm Savills said it expected prices to rise in Britain and revised its forecast for the next five years upwards.
It forecast increases of 3.5% next year, driven by strong growth elsewhere in the economy and a shortage of homes for sale. By the end of 2026, he said prices could rise 13%, the same growth that has been seen in the months since the housing market reopened after the first coronavirus lockdown.
Over the past 16 months, prices have risen in all areas of Great Britain. However, the largest increases have been in markets outside London.
Savills expects this trend to continue. By 2022, he has forecast 2% growth in London and growth of at least 3% in all other parts of Britain. Both in the North West and in Yorkshire and the Humber it has forecast increases of 4.5%.
Over the next five years, the company said it expected prices to rise 18.8% in both regions, while in London they would rise 5.6%.
“Given where we are in the housing market cycle, the north-south divide in home prices looks set to tighten further in the next five years,” said Lawrence Bowles, director of residential research by Savills.
“There remains more of an affordability cushion beyond London and the south. The government’s levelling-up agenda has the potential to accelerate a rebalancing of the market but only if it gains meaningful traction.”
However, despite the big rises in the north-west and Yorkshire and the Humber, the price gap between homes there and in London will remain huge.
By the end of 2026, Savills expects homes to cost an average of £272,732 in the north-west and £266,417 in Yorkshire compared with £713,987 in London.
Since the lockdown on the housing market was eased in early summer 2020, prices have risen sharply, fuelled by stamp duty holidays, lifestyle changes and record low mortgage rates.
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