North-South Gap Narrows

The prosperity gap between the North and South of the country has narrowed. Earnings, employment and house prices are rising faster in the North, according to the latest figures.

In northern regions average full-time earnings have gone up by 22% in the five years to April 2006. In the South they only went up by 18%. Meanwhile employment in the North has gone up by 5% in the five years to March 2007, compared with a rise of 2.7% on southern areas.

Since 2002 house prices in the North have jumped by 97%, whereas in the South they have managed only a 53% increase.

Halifax plc reported that the North, including the North East, North West, Yorkshire and Humber, East and West Midlands, Wales and Scotland had not outstripped the South in every measure. In the southern regions economic growth per head had showed faster growth. Unemployment also remains higher in the North, but the gap is closing.

Similarly, pay is still lower in the North. Southern wages were 21% higher: average earnings in the South were £31,020 in 2006, compared with £25,642 in the North.

The South also has much higher house prices still. The average house costs £265,921 in the South, whereas in the North it is only £158,636.

Meanwhile the impact of Home Information Packs (HIPs) continues to adversely affect property sales. Since the introduction of HIPs for three bedroom homes on 10 September, there has been a 37% drop in those homes for sale compared with the same period in 2006, according to the Royal Institution of Chartered Surveyors (RICS). This follows a 51% drop in the number of four-bedroom properties being put up for sale when HIPs were introduced for them in August.

RICS reported that 65% more of its surveyors were seeing a drop in the number of people putting three or four bedroom properties on the market that those that saw an increase.

RICS spokesman, Jeremy Leaf said that HIPs seemed to be having a detrimental impact on the housing market, despite assurances from the housing minister that this would not be the case.