By Martin Williamson, Head of Residential Property, Latimer Hinks Solicitors www.latimerhinks.co.uk.
The UK will experience a sharp widening in the North-South house price divide during the remainder of 2012, as increases in the value of London
However, rather than being a negative, I would argue that lower prices are actually a positive for our region and the fluidity of its housing market. Since 2010, the average house price in the North East of England has fallen below £100,000, according to official figures from the Land Registry. The trend will continue into next year, according to the Centre for Economics and Business Research (CEBR), when London prices will rise by 2.3% as those in the north-east fall by 1.3%.
Not only do lower house prices mean that more first time buyers can take that all-important first step on to the housing ladder, but they also mean that people above them on the ladder have the chance to move as well. This scenario will of course rest on the assumption that sellers further up the ladder have sufficient equity in their homes to buy their next property.
Home owners looking to move may be contemplating the prospect of selling their houses at a lower price than they would have done in 2010, when prices were 7.1% higher in the region, but they will also, clearly, be buying at a lower level these days.
This development represents an opportunity for first time buyers in our region. While the vast majority of prospective first-time buyers in London and the South East are finding themselves stuck in the rental market for the foreseeable future, many of their number in our region, at least have the very real possibility of owning their own homes before they collect their bus passes.
This can only be good news for our region. Equity loan schemes in the form of the Governments FirstBuy scheme, which I discussed in this column two weeks ago, as well as the NewBuy scheme, which provides assistance to people looking to buy a new-build property, will also help to make the housing market, as a whole, far more fluid.
So, rather than being stuck in the doldrums, as many doom-mongers predict, the regions housing market could be described as full of potential for anyone looking to move on to, or up, the housing ladder.
Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 50 people serving private and corporate clients. For further information: www.latimerhinks.co.uk or call 01325 341500.