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A Tale of Two Britains: the growing gap of the North-South divide

Posted on 2014-05-21

Scales of affluence are still tipping towards the South, as household wealth in the South East has been rising five times as fast as the rest of the country according to the Office of National Statistics (ONS). Just 1% of the population currently own as much as the poorest 55%, and it is most likely that this wealth is concentrated in the richest regions down South. 

  • Statistical reports show London still has rising wealth that sets it apart from the rest of the country.
  • The average price of rent in London is double that in the North East.
  • Household wealth is concentrated in the hands of a minority of the population who reside in the South. 

Scales of affluence are still tipping towards the South...

London and the South East

Scales of affluence are still tipping towards the South, as household wealth in the South East has been rising five times as fast as the rest of the country according to the Office of National Statistics (ONS). Just 1% of the population currently own as much as the poorest 55%, and it is most likely that this wealth is concentrated in the richest regions down South. 

ONS data shows that one in nine households have second homes or rental properties, meaning that many people have also been reaping the benefits of owning properties and becoming landlords. However, rising prices could bring stressful sighs from hopeful tenants as recent Rental Index data reveals that rents in London have now reached a new high. 

It is now 9.4% more expensive to rent in London compared to April 2013, meaning that tenants could be forking-out around £1,348 a month. Although, this is the largest annual increase in the capital’s average rental figure since April 2011, tenants’ wealth has also increased by 3.5% to around £37,400 per annum. This might not sound like much, but it’s actually 82% more than tenants in Wales earn, which means that London not only has some of the richest landlords in the country but some of the richest tenants too. 

The region with the next highest average rents is the South East. On average, tenants can expect to pay £858 a month according to April 2014 data, as the South East is actually the only region where rent has risen consecutively for three months. 

Does this mean the divide is getting bigger? Well, it may be down to demographics, as many people who rent in the South are drawn from overseas or move temporarily to work or study. This could explain why these regions are so unusual when compared to the rest of the UK, especially the North. 

The North and North East

Although there was a dramatic rise in the market, ONS figures report that Northern regions missed out as increased values primarily benefitted households in the South East. 

The scales of wealth are also tipped by Yorkshire and Humber and the North East, as they are the only regions to have seen annual decreases in average rental amounts. The North East is actually the cheapest region to rent as the average rent price is only £522 per month, which is almost half of the London figure.

To add to this, the North East is currently the region with the lowest median wealth of £142,700 compared to £309,700 in the South East and, in fact, all Northern regions have a median household total wealth of less than £180,000.

Transport, network and commerce connections between the North and South may be strengthening with the arrival of HS2, but with these recent wealth and property figures it seems that the gap may continue to widen for a while yet.

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