House price gap at record high as London growth hits double figures

Average prices in the South now twice as high as those in the North. The annual rate of price growth in London is currently the highest in the country and accelerated to 10.6% in Q3, up from 7.3% in Q2.

The price of a typical home in the capital (£443,399) is more than double the UK aggregate and more than three and a half times the price of the typical property in the cheapest UK region (the North of England).

On a wider level, regional house price performance was mixed in Q3. Eight UK regions recorded a slowdown in the annual rate of growth, while five saw acceleration. Most parts of the country continued to see annual house price gains - the exceptions were Scotland and the North West which both recorded small declines.

House prices continue to recover in Northern Ireland, with annual growth of 6.5% in Q3, although average prices are still 44% below their pre-crisis peak.

Wales saw a 1.9% year-on-year increase in average prices, a slight improvement compared with recent quarters. Scotland was the weakest performing region for the second quarter in a row, with a 1.3% year-on-year fall, similar to the 1% annual decline recorded in Q2.

UK house prices increased by 0.5% in September, with the annual pace of house price growth picking up modestly to 3.8%, from 3.2% in August.

Robert Gardner, Nationwide's Chief Economist, said:

“The data in recent months provides some encouragement that the pace of house price increases may be stabilising close to the pace of earnings growth. However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.

“Indeed, in recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries. Therefore it is unsurprising that most surveyors expect a pickup in house price growth in the months ahead."