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House prices hold up best in cities

Alex Johnson

a48e0f8425bf3d282346531bc682bfb42ba114db 300x291 House prices hold up best in citiesHouse prices in cities have risen by more than the UK as a whole over the past decade, according to new figures from Halifax. Excluding eight of the 69 ‘official’ cities in the UK (City of London, Wells, Armagh, Ripon, St David’s, Newry, Bangor and St Asaph due to an insufficient sample size) their figures suggest that prices in cities increased by an average of 38% from £125,276 in 2002 to £173,322 in 2012.  This beats the 29% rise for the UK as a whole.

Martin Ellis, housing economist at Halifax, said: “The majority of cities have also outperformed their region. The experience of towns that have been made cities since 2000 has been mixed.  Some have gone on to outperform their region after gaining city status whereas they had underperformed previously. This, however, has not always been the case.”

The Scottish cities of Aberdeen (94%) and Inverness (81%) recorded the biggest price rises between 2002 and 2012. Two other Scottish cities – Dundee (73%) and Perth (70%) – also feature in the top five.  The dominance of Scottish cities partly reflects the outperformance of house prices in Scotland relative to the rest of the UK over the past decade.  Aberdeen has seen particularly sharp price increases due to the importance of the oil sector to the local economy.

The two English cities recording the strongest increases are both in Yorkshire and the Humber, Bradford (77%) and Hull (68%).  The region generally has outperformed the UK in terms of house price performance over the past 10 years and average prices in Bradford and Hull are relatively low – both are among the five cities in the UK with the lowest average prices – providing the potential for stronger gains than cities with higher prices.  All ten cities experiencing the biggest price increases are in northern Britain.

The Northern Irish cities of Lisburn (2%) and Belfast (3%) have seen the smallest price rises over the last ten years, largely reflecting the substantial decline in house prices across Northern Ireland since 2007. Ely (14%) and Southampton (16%) have recorded the smallest increases in England.

At a time when there are growing concerns about the affordability of property, the majority of cities have outperformed their region in terms of house price growth since 2002. Two-thirds (67%) – 41 of the 61 cities surveyed – recorded average house price increases above their region’s average over the period.

Cities have done well in relative terms in the five years since the housing market peaked in 2007. House prices in cities have fallen by an average of 17% since 2007 compared with the UK average decline of 23%.  70% of cities recorded a better house price performance than their region between 2007 and 2012.

Towns that have become cities since 2000 have, on average, outperformed the country as a whole during the past decade. Eleven towns have become cities since 2000.  On average, these new cities have seen house prices increase by 39% since 2002. This is closely in line with the average rise for all those places that have been cities throughout the last decade (38%), but is above the 29% increase for the UK as a whole.  Six of the nine1 new cities analysed have outperformed their regions over the decade: Newport, Stirling and Lisburn are the exceptions.

All three towns that became cities in 2000 – Brighton & Hove, Inverness and Wolverhampton – have recorded stronger house price growth than their region over the past decade.

The experience of those towns that became cities in 2002 to coincide with the Queen’s Golden Jubilee has been mixed.  Preston recorded stronger price growth than its region between 2002 and 2012 whilst Newport, Stirling and Lisburn underperformed relative to their region. During the decade prior to 2002, Stirling and Lisburn outperformed their region whilst the others underperformed.

10 Cities with highest house price growth, 2002-2012

City Region Average House Price  2002 (£) Average House Price  2012 (£) 10 year change (£) 10 year  change

(%)

Aberdeen Scotland 92,759 179,607 86,848 94%
Inverness Scotland 86,669 156,832 70,163 81%
Bradford Yorkshire & the Humber 60,002 106,015 46,013 77%
Dundee Scotland 69,615 120,086 50,471 73%
Perth Scotland 95,488 162,259 66,771 70%
Hull Yorkshire & the Humber 60,515 101,914 41,399 68%
Carlisle North 72,895 120,557 47,662 65%
Durham North 80,802 133,463 52,661 65%
Swansea Wales 76,110 120,483 44,373 58%
Stoke On Trent West Midlands 74,305 117,131 42,825 58%
Cities Average 125,276 173,322 48,046 38%
United Kingdom 136,204 176,121 39,917 29%

10 Cities with lowest house price growth, 2002-2012

City Region Average House Price  2002 (£) Average House Price  2012 (£) 10 year change (£) 10 year  change

(%)

Lisburn Northern Ireland 97,296 99,690 2,394 2%
Belfast Northern Ireland 101,583 104,921 3,338 3%
Ely East Anglia 152,624 174,116 21,491 14%
Southampton South East 160,266 186,621 26,356 16%
Worcester West Midlands 152,233 183,941 31,708 21%
Oxford South East 243,889 295,083 51,194 21%
Londonderry Northern Ireland 79,992 97,473 17,482 22%
Chelmsford South East 192,719 239,809 47,090 24%
Peterborough East Anglia 117,981 147,531 29,550 25%
Portsmouth South East 123,306 154,405 31,099 25%
Cities Average 125,276 173,322 48,046 38%
United Kingdom 136,204 176,121 39,917 29%

10 Cities that have outperformed their region the most, 2002-2012

City Region Average House Price  2002 (£) Average House Price  2012(£) 10 year  change (%) Region’s

10 year  change

(%)

Out-performance of Region (Percentage Points)
Stoke On Trent West Midlands 74,305 117,131 58% 24% 34%
Aberdeen Scotland 92,759 179,607 94% 63% 30%
St Albans South East 247,795 369,267 49% 21% 28%
Bradford Yorkshire & the Humber 60,002 106,015 77% 50% 27%
Salisbury South West 183,651 280,013 52% 26% 27%
Hereford West Midlands 129,720 186,098 43% 24% 20%
Winchester South East 240,349 339,053 41% 21% 20%
Brighton And Hove South East 185,293 259,091 40% 21% 19%
Hull Yorkshire & the Humber 60,515 101,914 68% 50% 18%
Westminster Greater London 377,339 555,962 47% 29% 18%
Cities Average 125,276 173,322 38% 29% 9%

For more on property prices see Tuesday’s blog post Average price of a new home is now £229,571

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  • organaphus

    Just for the sake of balance, I live about 7 miles north west of the city of Chester, where a bungalow which was valued at £160,000, has been sold for £80,000.

  • http://twitter.com/andymcrowe andy crowe

    How sad that the Independent is falling for the estate agents’ propaganda that high house prices are a good thing. Instead of ‘outperforming’ you should be saying that city prices remain unaffordable for most people.’ Lazy.

  • http://twitter.com/daddacool Daddacool

    The important thing to take from the Halifax’s figures is they are the Halifax’s figures. If you look at the Land Registry figures, they show much lower average prices and much lower growth.
    That’s because Halifax only show the average prices for transactions they are involved in. If they’ve become more risk adverse in the last three or four years, they’ve been lending to more people with existing equity, people who are moving up the housing ladder, spending more on their next property. The increase in average house price per Halifax then doesn’t reflect the average house price as a whole. It’s a massively incomplete picture.

  • Pingback: Average price of a new home is now £229,571 | Alex Johnson | Independent Editor's choice Blogs

  • Pingback: Average house price in England and Wales is now £162,080 | Alex Johnson | Independent Editor's choice Blogs


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