The North-South Property Divide

Alex Goldstein is ‘live’ on Talk Radio with Mike Graham, discussing the North-South property price divide and why southern prices have dipped for the first time in 8 years. Why has this happened and what is the driver behind it all?

Full Transcript Below:

Mike: Coming up in this hour we got the Carrier Awards because it’s Good Friday we are going with them a day early. Alex Goldstein, Property Consultant is going to join us because apparently for the first time in eight years, the value of homes in the north has risen while the value of homes in the south has gone down. It’s the north-south divide but upside down. It’s very weird. You’re listening to me Mike Graham. Right hear on Talk Radio.

The Independent Republic of Mike Graham on Talk Radio.

Now we were talking earlier to a guy from Liverpool who said, you know, if you guys think travelling around in the south of England is bad news, you should try getting on a train up here. Because the travel problems they have had in the north of England particularly between the northwest and the northeast have been famous. This has been going on for many, many years where the trains are so bad that nobody can really afford to use them if they have got to get to work because quite frankly, they are not fit for purpose. What they can do though, of course, up in the north of England is to buy homes for a lot less money than you can buy homes for generally speaking in the southeast. However, southeast England property prices have actually fallen for the first time in eight years while the value of homes in the northwest has risen by 4%. Let’s talk to Alex Goldstein who’s a property consultant to find out what is going on. Alex, very good afternoon to you.

Alex: Good Afternoon, Mike. Good to speak to you.

Mike : Thank you for joining us. It’s an interesting one because for a long-time people have said, we can’t afford to buy property. The Millennials are all complaining that the problem of prices for houses in the southeast is prohibitive. But there have always been affordable properties in different parts of the country and maybe now, finally, we are seeing property slightly correcting itself in a sense.

Alex: I think you’re absolutely correct. In fairness, I think the southern and Home Counties market, it was overheated, and something needed to happen to temper it down. But what’s amazing at the moment is there’s a seismic shift, I feel, in how people wish to live at the moment and there is a major movement towards quality of life and the work-life balance. And as more and more London orientated or Home County orientated companies actually have footings up in the northern regions there is again, people can afford to move up and be in the London office two to three days a week not five days a week.

Mike: No quite. And I mean how different is the gap between say the average price in the north. It is a bit of a nebulous concept of north of England. I’m not sure where it begins. For me it begins in Edgeware because I’m a Londoner, I mean where does it technically begin?

Alex: Many would say north of Watford Gap of course. For example if you look at Birmingham and go across the Pennines and you’re looking at Manchester and you’re looking right into Yorkshire. Harrogate, Leeds at the moment is absolutely flying. You got Channel 4 putting in their head office there. You got HMRC. These are significant legal and finance institutions and they are putting big footings down in these areas and I think that’s what’s driving the move on top of, like I said, a bit life-work balance movement.

Mike: Sure and Leeds has always been a place where there has been quite a lot of money, hasn’t it?

Alex: It has. And again you have two hospitals in Leeds as well. Dare I say, the footballers out there, Leeds will hopefully come back into the Premiership. Huddersfield are in the premiership. And it does make a big difference.

Mike: Not for much longer. I don’t think though.

Alex: Wait and see. Anything can happen.

Mike: But it’s interesting as well, possibly, and you can correct me if I’m wrong here, but Cheshire area around Manchester and Liverpool as well, very much boosted by the footballers that are playing for the big clubs up there.

Alex: Absolutely. I think if anywhere is a great example it is in and around Manchester and Cheshire. They do bring a sizable amount of money into the economy. Equally on the other side of the Pennines, the Tour de Yorkshire, the Tour de France. Again we got the UCI Cycling Championships as well. Some would argue that Yorkshire is one of the only counties that’s got a brand out there at the moment. Again all of these, Manchester and heading across the Pennines, it’s constantly in the nation news. And I think a lot of buyers are picking up on that and hence you are getting a lot of families relocating and looking for that lifestyle.

Mike: Well I have to say, trying to get around London at the moment is such a nightmare that if you could provide a reasonable amount of money for a job in the north of England, which wouldn’t necessarily be exactly same amount of money you’d get in London, the lifestyle is a lot better isn’t it?

Alex: Hugely so. I mean you’ve got vast, open, green spaces. Less overcrowding especially when it comes to housing, you’re more spread out. And dare I say, every time I split my time between the north and London. And people always say that people are generally so much more friendly and relaxed. A generalisation albeit. Schools as well. And as I said, you don’t need to be in the office five days a week. You can be flexibly working. Work from home. Go into the office when it’s needed. And that helps both employees and employers in terms of costing. I just see this as a very sizable shift both in terms of how employment is working and indeed the property sector.

Mike: Sure. And was there any sort of boost to Manchester and the northwest when the BBC set up such a big outfit in Salford? Salford is very much a draw for media companies and all that. I went up to Salford a couple of years ago and it was sort of like a ghost town. There wasn’t much going on. Yes, the big BBC place was there. Salford Theatre was there as well but it didn’t feel like a buzzing metropolis.

Alex: As with all these things, it takes time. It will take time for that to pick up speed. I certainly think it has picked up speed and as you said, it’s just the bolt-ons sort of effect it creates. Again the same could be said for Leeds and Channel 4 moving in there. Again these things don’t happen overnight but again such a significant institution coming into both areas, companies and employers gravitate towards them.

Mike: So if you were an investor, property wise coming into these areas, where would you say to people is a good place to buy a home now in England. The place where it’s likely to rise up the most?

Alex: For me, at the moment, it’s the areas we discussed. Across major parts of Yorkshire, Leeds, Harrogate, Ilkley. As you mentioned, Manchester, Cheshire. There is a big push for urban or just outside of town living at the moment. And I think if you are looking to invest as indeed a lot of developers and investors are doing, they’ve long since moved out of London and are looking towards the secondary cities in the UK as that’s where you’re going to see the uplift.

Mike: And I mean 1.8% down in southeast overall, I mean there’s still a long way to go before anyone who doesn’t have an awful lot of money will be able to afford to buy anything.

Alex: It needed correcting. We probably don’t have time on today’s show but first-time buyers and that side of things, we have got a fairly significant range of issues here. I think the stamp duty that was introduced by George Osborne and its reduced prices, but we are a long way from helping those trying to get on the first rungs of the property ladder. The homes being built aren’t particularly good quality across the board if you are looking at the big developers on there. I don’t think the banks lend particularly well and aren’t prepared to take a view. There are just layers and layers of issues. I would be happy to become the Housing Minister and try to sort this all out.

Mike: Fascinating stuff. Alex, thank you very much. Alex Goldstein, Property Consultant, there on the rise of prices in the north of England and the fall of prices in the south of England which is happening for the first time in eight years.