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House price divide between North and South to widen

A sharp widening in the North/South divide for house prices in 2012 is being forecast by the Centre for Economics and Business Research.

A rise in London house prices of 2.4% so far this year, compares with a fall in North East house prices of 2.7%. A further, though less rapid widening is forecast for 2013 with London prices up 2.3% and North East prices down 1.3%.

Cebr believes the re-intensification of European financial turmoil in the last quarter has further boosted international demand in UK property, with wealthy investors seeking save havens for their assets.

It expects this investor demand, centred on prime markets in London and the South East, to help support marginal price growth over the year. Historically low interest rates and relative lack of housing supply are two more factors set to continue supporting property values.

Douglas McWilliams, chief executive of Cebr, says: “Demand in the London market remains resilient, with the ongoing Eurozone drama piquing international interest in the capital.

“Furthermore, we can expect an abundance of affluent French citizens to be shopping for homes in London if President Hollande’s proposed 75% top rate of income tax is enacted.”

Moreover, developments in the wider UK rental market are also forecasted to contribute to price growth over 2012. The latest data from the Office for National Statistics shows annual rent inflation has held steady at 3.1% since the turn of the year. This is markedly quicker than earnings growth, and considerably above the pace of house price increases.



Banking reforms could penalise low-risk lenders, Nationwide warns

UK banking reforms could hit mortgage lending and punish low-risk lenders, Nationwide claims. Under proposals laid out by Sir John Vickers in the Independent Commission on Banking, lenders will need to hold significantly more capital to guard against shocks. The ICB suggests a system split into risk-weighted capital buffers and a leverage ratio set against […]

A bull case for US equities?

Neptune video: a bull case for US equities?

Watch Felix Wintle, head of US equities at Neptune, discuss why he believes US equities are in a structural bull market and the key factors that can drive the S&P 500 higher.

In the video, Wintle addresses the following:

• The US market and why — despite equities rising from 2009 — he believes the structural bull market only started in 2013
• Key economic and corporate factors that can drive the S&P 500 higher
• Investment themes and sectors offering exposure to the domestic recovery


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