House prices in boom locations soar by £110,000 in 10 years

Tuesday, 26 June 2012 09:26

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House prices in areas with the strongest economies have climbed by £110,000 in the past decade, new research indicates.

The Halifax said the best performing locations economically have also seen property values remain the most resilient since the 2007 downturn.

The cost of a typical home in 10 such areas has leapt by 145 per cent, from around £75,222 in 1999 to £184,491 in 2009 – equivalent to an increase of £228 every week.

The house price hike in the top performing locations was almost a third higher (31 per cent) than the £83,501 increase in average property prices in the 10 areas with the smallest rises in economic activity over the same period.

And the overall house price in the flourishing areas is also around 25 per cent higher than the struggling locations, the lender’s study shows.

Brighton and Hove, which at 206 per cent recorded the largest rise in house prices, also saw the fourth biggest increase in the value of economic activity at 63 per cent.

Cornwall and the Isles of Scilly, which recorded the second biggest rise in house prices at 198 per cent, was the sixth fastest growing area in terms of economic activity at 60 per cent.

Martin Ellis, housing economist at the Halifax, said: “The marked differences in local economic performance across the UK appear to have had a significant impact on the housing market over the past decade.

“Looking forward, the pace at which the UK economy recovers will be a key determinant of the outlook for the housing market. Similarly, those areas that perform best in economic terms are likely to fare best in terms of house price movements.”

Since 2007, the 10 local areas with the largest falls in economic activity – as indicated by the largest percentage point rises in unemployment – have seen house prices fall, on average, by 27 per cent.

This is more than double the average 12 per cent decline in house prices in the 10 areas that have recorded the best performance in unemployment over the period, the figures reveal.

 

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