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From The Times

January 26, 2007

Average prices in the South are 1.59 times higher than the North

Remember the Eighties? Well the gap between prices in the North and South is here again

Anne Ashworth: Property editor

IT’S déjà-vu time. The North/South divide, that feature of the property market in the Nineties, is staging a comeback. Meanwhile, repossessions, a word that brings back bad memories from the early part of that decade, are again a topic under discusion.

But, although economists are once more pronouncing the “R” word, they do not want to start a panic. David Stubbs, economist at the Royal Institution of Chartered Surveyors (RICS), forecasts that the number of homes being repossessed is set to increase slightly this year to 19,000. This would be three times the total for 2004. In 1991, by contrast, there were no fewer than 75,000 repossessions. RICS thinks richer, older buy-to-let investors will be less likely to fall behind with their repayments than overstretched new homeowners.

The repossession crisis of the Nineties is not about to be repeated. But even the small predicted rise could be limited if banks and building societies acted now to ensure that as few of their young customers as possible fell into difficulties. The rules of responsible lending (to which all these institutions pay lip service) should be properly observed this year.

Despite hotspots such as York, the gap between prices in the North and the South is widening after a successive narrowing in 2003, 2004 and 2005. Halifax predicts this trend will continue, even against a general market slowdown. The average price in the South is now 1.59 times higher than the average price in the North; in 1996 it was just 1.45 times higher. Halifax defines the South as London, the South East, the South West and East Anglia; the North is the rest of the UK, including Northern Ireland and Scotland.

The performance of London is not the only reason why the South is outpacing the rest. Property in Oxford is now the third most expensive in the UK at £2,942 per square metre, behind London (£4,137psm) and St Albans (£3,008psm). There are probably many inhabitants who remember the city’s property price levels of the Eighties. In 1987, a house in Jericho, a once scruffy suburb of Oxford, cost an average of £68,399. Today’s price is £ 481,235.

THE ETERNAL PLANNING DEBATE

The caption of the cartoon is “Going Out of Town”. It shows monsters with picks and axes for limbs and hods for heads rampaging across a rural landscape, tearing up trees and flowers. In 1829, when this cartoon appeared, George Cruickshank, the caricaturist, was depicting the general alarm over uncontrolled urbanisation. London, bursting with people, was sprawling out to greenfield sites such as Fulham.

Today the monster builders would be made of JCBs, but the concerns remain, as will be shown this year in the ever-more tense debate between those who fear the concreting over of the countryside and those who see no other alternative to providing new homes. The main focus of the dissent will be the White Paper, due in March, detailing how the planning system is to be streamlined.

The Policy Exchange, a think tank, is among those who want these proposals to be radical. Its latest research contends, for example, that limits on housebuilding lead to a scarcity of homes. This drives up property prices, which are then controlled with painful interest rates rises.

The Royal Town Planning Institute (RTPI) questions almost all the Policy Exchange’s assertions. As the RTPI is not a Nimby body — it seeks to create a better built environment — this shows the complexity of the arguments about what will be permitted to be built where. The Competition Commission’s decision this week further to investigate Tesco and the other supermarkets’ use of planning laws and how this affects small local shops illustrates this multiplicity of views Bricks and Mortar is joining the debate on the future of high streets with our new series Down My Street (page 15), where our correspondents assess the state of their neighbourhood shopping street. You can give us your opinions on your high street. Or if you prefer to see the planning debate in historical context, visit London: A Life in Maps, the current exhibition at the British Library, which tells the story of the spread of the metropolis, both before and after the imposition of planning laws, through the eyes of Cruickshank and more dispassionate cartographers.

FOR SALE: PAPARAZZI-PROOF PAD

My extraordinary American home of the week is once more in New York; the city has an usually high number of people who chronicle the property excesses of the rich and famous. A development in the hip TriBeCa neighbourhood will be paparazzi-proof. Owners will be able to drive into a lift that takes them to a garage adjoining their apartment.

This will deny photographers the chance to snap the celebrity on the way from car to front door. The price of this privacy is $5 million. The relocating Beckham family, who must surely want a Manhattan pad as well as an LA mansion, should note that this is something of a bargain as sterling moves closer to the $2 mark.

anne.ashworth@thetimes.co.uk