'Northern Powerhouse' Faces Impossible Task to Catch Up With the South

Chancellor George Osborne's vision of creating a Northern Powerhouse looks to be a pipe dream as far as the region's struggling property market is concerned.

Latest analysis of regional asking prices by Home.co.uk shows just how badly the North of England property market has fared over the last seven years, while London and the South of England have prospered.

Asking prices across the North of England fell in every region between July 2008 and July 2015. The worst affected area is the North East, where asking prices last month were 6.45% below their July 2008 level.

Over the same period asking prices in the North West fell 5.72%, and in Yorkshire & The Humber the slump was 4.56%.

This dire set of figures contrasts starkly with the property boom London and the South of England have recently enjoyed. Over the last seven years asking prices in the capital have rocketed by a staggering 44.9%, while in the South East the rise was 24.71%.

Percentage Change in Asking Price by Region Since July 2008

Elsewhere across England, asking prices in the East saw a rise of 14.98%, the South West rose 9.82%, the East Midlands 6.72% and the West Midlands 3.05%.

Meanwhile, Scotland and Wales have suffered a similar fate as the North of England with asking prices down 4.56% in Wales and falling 5.72% in Scotland over the last seven years.

In real terms, taking into account seven years of inflation, the actual capital losses for property in the North, Scotland and Wales are in the range of 25-30%.

These latest figures follow Osborne's continued pledge in his July budget to create a Northern Powerhouse by boosting infrastructure, employment opportunities and the building sector across the region.

In an earlier speech made in Manchester in May, he also promised "a new approach to rebalance the economy" by delivering sustained growth to the North.

But his latest budget also included a series of further austerity measures, including cutting back on Working Tax Credits, a move that is set to make affording a home even more difficult for many low income families in the North of England.

Home.co.uk director Doug Shephard said: "It seems an appalling injustice that post-crisis economic measures have effectively meant austerity for the North and stimulus for the South and London. The North-South divide has been greatly exacerbated in recent years.

"There is no 'housing crisis' in the North and there would not be in the South if workers weren't forced to up sticks and move south to earn a living.

"Talk of rebalancing the economy is just that. The once industrial powerhouse of the North remains a mere shadow of its former self as investment capital is continually diverted into the property sector while our manufacturing base shrinks. In addition, jobs remain scarce. It is a healthy labour market that drives a healthy and sustainable housing market, not Help to Buy schemes."

Source: The Home.co.uk Asking Price Index

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