Why are houses so much cheaper up north?

[CliveThighs]

OK, I'm aware this is probably a silly question so please don't flame me too much.

But I live in the south east where a 3 bed terrace costs around £350k. Which is crazy high. But somehow my brain has accepted that this is what a house costs.

But I fell down a zoopla/rightmove rabbit hole earlier and realised that up North a 3 bed terrace is about 1/3 of the price.

So what makes the south so much more expensive. I know the theory is London jobs and higher wages in the SE but are wages really that much lower in the North? Surely teachers, nurses, doctors, lawyers get paid roughly the same where ever they are in the country? Minimum wage is the same all over the country, and the vast majority of those living in the SE don't earn these magically high London salaries?

[ineedsun]

Supply and demand?

Generally speaking I think that some areas in the north have more heavy industry which means that wages are lower than (for example) IT / finance etc.

Maybe a perception that it’s grim up north?

[SeedsForDeeds]

A 3 bed terrace where I live (North West, suburb of major city) doesn't come for less than £350k?

[tobypercy]

Supply and demand.
There are (perceived to be) more jobs in the south, and better paid.
So people move there for work.
People who've always lived there don't want to move away because it's their home and where their families are, etc.
More people trying to buy a fixed number of houses means prices go up.

Meanwhile "back home" in the north there are still as many houses but fewer people to buy. So prices go down.

40 years ago it was only places within half an hour or so of London which had such sky high prices. But now people have to travel further and further to be able to afford a house "within commuting range" of all those London jobs.

[SliceOfCakeCupOfTea]

Well I earn £30k but the same job done south would be around £45-50k according to Glassdoor and indeed.

Generally speaking, bigger organisations set up shop down south (partially due to supply chain I hear) and as there are more companies close together, to get the good staff they have to pay more. It's kind of an on going cycle.

I think the same is true for housing. So many people packed into an area, all trying to live centrally will push the prices up and up.

I'm based right up north and, historically, our town was so far removed from the realities of London so it was seen as a much less desirable area therefore not as much demand for housing. You can look at Northern towns from the early to mid 20th century and compare with London at the same time and you'll see a huge difference.

[TheWayTheLightFalls]

Demand, perception. £350k sounds glorious; it’s no change from a million round here.

[SpikeySmooth]

I live in London in a poky flat worth £360k (according to Zoopla) and have been looking North to move. It's not all "grim", a lot if it is beautiful, and having spent time in Yorkshire, Lancashire and Cheshire, know people are much nicer there. Wages are much lower but most people in London are struggling to find housing and live a good life even with London weighting now so a lot of people are leaving.

[CalIie]

It’s a combination of factors:

Largely down to demand - there’s around 20 million people living in London and the South East
Salaries are higher
Large buy-to-let market, pushing out would be home owners
Planning regulations restrict the amount of land available to developers, even when land is available there can be land banking
Lots of foreign investment into London property inflating prices

It’s not just in London and the South East. There are also affordablity issues in the North, think York and Manchester for example. Where there are large economic hubs there will be more demand for housing in contrast to say Doncaster and Rotherham.

[AliceMcK]

Depends where in the north are you looking. Like everywhere the north has expensive locations, close to big cities where there is job demand, “it locations” where people care are their status and postcode.

[ethelredonagoodday]

Was going to say, property prices in the north vary hugely. Some areas are very reasonable, some have very inflated prices. I don't think many are quite at London levels, but some are not far off...

[lightnesspixie]

Erm ... weather? 🙈

[FireworkParrot]

There are pockets everywhere, I lived in two very affluent areas in the North and now live in the South East and there's no difference in house prices. I think there are more people and more jobs in the South though and perhaps more larger employers. Certainly my siblings and I all moved away from our home town in the North to find work, despite it being a lovely place to live there just aren't the same number of jobs. I don't feel that will be the case for DDs, we're in an area with a lot of employers.

[balanceo]

As a previous poster said 'supply and demand'. For the same reason house prices vary considerably within the North; Harrogate, Yorkshire, Didsbury, Manchester, and Wilmslow, Cheshire; for example are expensive. Bradford, Yorkshire, and Blackpool, Lancashire are much less expensive. But especially in the cities cheaper and dearer areas will often rub shoulders. Many towns in the North, eg; seaside resorts, and mining areas, have have lost their reason for being, there are no jobs, the population drifts away.

[theemmadilemma]

I'm interested to see how that changes over the coming years as more and more people work from home.

Both my Partner and I WFH full time and moved from Berkshire to South Yorks last year. We love it here - I'd never go back South, but it was mainly the ability to do so and have a much larger house and more importantly for us, garden that prompted us to move.

[Classicblunder]

A lot of it is that some of the very cheap Northern areas had big industries - steel works, mines, factories etc - which meant a lot of housing was built there. Now most of that industry is gone but the houses are still there. So there are more houses than people who want to buy them.

[Karenetta]

Well there's no shortage of dwellings as such down south or anywhere so it's not supply and demand.

It's access to capital investment. In places where people have access to larger amounts the amounts are larger. To an extent in the SE this was driven by wages which are higher across both public and private sectors. Now it's also driven by the rise of the new landlord class. Happens in the North as well (fewer owner occupiers across the country now than there were in the 1980s) but in the South this class has more financial clout and investments and returns are higher accordingly.

[user1497207191]

Lots of jobs have different salary levels according to location. Eg, qualified accountant jobs in my town are about half the going rate for similar jobs in our nearest city, and about a third of similar job salaries in London/SE. It's all supply and demand. Firms in the cities have to offer higher salaries as there is lower supply, whereas firms in run down towns offer lower salaries as people around them don't need as much to live on (and their clients/customers have lower disposable incomes so charges/prices are correspondingly lower).

As for nurses, teachers, etc., yes, their wages are broadly similar in all areas, hence why they tend to live in the "nicer" areas in my run down Northern town - they're the ones with the money, as their wages are higher than the local average wage.

[Karenetta]

But yeah agree with others that North isn't uniformly cheap. Houses in a nice area of Manchester are way more expensive than they are in eg Dagenham.

[latetothefisting]

1. prices generally aren't THAT cheap everywhere in the north/other 'more affordable' places. There are lots of more expensive areas too
   
   
2. Yes public sector salaries should be the same throughout the country (with the exception of London weighting) - the difference is whether these jobs are the average or not. In lots of places a £23k job in the local council would be a really good job, as it pays significantly more than your friends earning minimum wage with better job security and benefits, and there aren't a huge number of other job opportunities in well paying private sector jobs.
   
   In other places (like the South East) £23k would be considered to be a fairly bad wage as it's significantly under the national average. MN is disproportionately SE based and there are thousands of threads saying "but shouldn't a graduate start on at least £40k," or "me and DH both work in middle management so have an average salary, nothing special, £100k in total." In some places your choice could be £20k doing admin for the local solicitor or £23k doing admin in the Council. In London (or anywhere commutable to it) you could choose between the same £23k council job or a similar PA role with very same skills and job description in a big private company paying two or three times the amount.
   
   
3. supply and demand. There's a lot more space outside of London and the SE and a smaller population per square meter, so less competition for housing and more space to build new houses (although whether it actually gets built or not is another matter). The population of London alone is 3 times that of Wales, for example.

[Evanesco]

I'm up north and while you can get a 3 bed terrace for less than 350k round here its because they're in less than desirable areas.

I know that's not the point of your thread but not everywhere up north has 3 bed houses for £100k.

I think the reason the SE is more expensive is due to supply and demand. In previous decades the well paid jobs were in London and the demand to live in an area commutable to London was high. Since eg Manchester has become a major business centre the houses in the commutable areas (especially to the south) have also increased and its hugely expensive to live in eg Altrincham/ Hale/ Bowdon/ Didsbury /Chorlton etc etc

Perhaps with the advent of WFH we will see prices in the SE stagnate and houses elsewhere increase in price, which is good for those already on the property ladder but will make things even tougher for FTB.

[A580Hojas]

I find this an interesting question and agree that people on standard, set salaries like medicine and teaching must feel SO much better off than their equivalents who live in the SE and especially London.

I do think it is a rare family or couple (or individual) who will happily upsticks and move hundreds of miles away from their familiar stomping ground just to get a cheaper or larger house. We had to move for DH's job once and absolutely hated being away from friends and family. Couldn't wait to move back home two years later.

Where we moved to we could have easily afforded to buy a 4 bed detatched house with a big garden in one of the nicest parts of the city. Instead we came home to live in a tiny 2 bed rental - and were so much happier for it.

[emmathedilemma]

"up north" is a ridiculous generalisation. There are very expensive parts of the north just like there are cheap parts of the South. I live further up north than most and a 3 bed flat costs upwards of £350k near me!

[DurhamDurham]

On the whole they're cheaper. That's the reason we moved to County Durham from Buckinghamshire.
It's true that some wages tend to be less than the same job down South but not to same extent as the difference in house prices.

We both took pay cuts of around £5k when we moved up north. Our house was £150k less expensive, as well as being bigger and in a nicer area. If we still lived down South we'd have a mortgage for another ten years or so but we're now mortgage free and we've both dropped a day at work so do a four day week.
Moving north has meant a much better standard of living and quality of life so for us it's definitely not grim up north

[BalladOfBarryAndFreda]

Higher average salaries, regionally.

Commutability into a major capital city where certain industries are concentrated and some roles just don’t exist or are extremely scant outside of London.

[BlueStripedTowel]

For £350k you could have a 4 bed detached new build up in Scotland (surrounding areas of Glasgow)...

[RuthTopp]

If I want a decent sized supermarket or a choice of more than one , I have a round trip of 60 miles . My dentist is a 40 mile round trip . I am North West , 20 miles or so from the border of Scotland.