Regional House Prices Quarter 2 2006
21 February 2006
Source: HBOS
Antrim in Northern Ireland and Lochgelly in Scotland are the UK's top property hotspots with both recording a 36% rise in prices over the past year. Average prices in Antrim are up from £108,318 in 2005 Quarter 2 to £147,761 in 2006 Quarter 2. Average prices in Lochgelly in Fife are up from £68,915 to £93,731.
Towns in Scotland and Northern Ireland dominate the top ten ……
Towns in Scotland and Northern Ireland – four each - dominate the ten towns that have seen the biggest house price rises during the last 12 months. The remaining two towns in the top 10 are in northern England. (See Table 1)
Scotland, South West and East Anglia record biggest house price increases in 2006 Q2 ……
House prices increased in all regions during the 2006 Q2 with the exception of Wales, with the biggest rises in Scotland (5.7%), South West (3.8%) and East Anglia (3.5%).
The smallest increases were in North West (0.2%) and North (0.9%). Wales showed a slight fall (-0.8%), reflecting the increasing affordability difficulties for buyers as a result of the very rapid rise in house prices over the past few years. The modest drop in Wales, however, should be seen in the context of an increase of 121% in the past five years.
Southern England – Greater London, South East, South West and East Anglia - accounted for around 40% of the overall rise in UK house prices in the first two quarters of the year. This is significantly higher than in 2005 when rising house prices in the south accounted for less than 25% of the increase in UK house prices.
North/south divide widens following four years of narrowing ……
The pick-up in house price inflation in Greater London over the past year (10.9%) contributed to a slight increase in the ratio between prices in the south and north1 in 2006 Q2. This follows four years of almost continuous decline in the ratio. The average property price in the south stood at 1.58 times the average in the north in 2006 Q2 – £228,349 in the south against £144,944 in the north, a difference of £83,405 - compared with a peak of 2.19 times in 2002 Quarter 2.
During the last major housing market cycle, the ratio between prices in the south and north fell from a slightly higher peak of 2.27 in 1988 Q2 to a lower trough of 1.31 in 1992 Q4. The lower trough reached in the current cycle may suggest an upward movement in the north/south house price divide over the long-term.
Only 5 towns now have an average price below £100,000 ……
There has been a pronounced decline in the number of towns where the average price is below £100,000 in the past few years. As expected, there are now only a handful of towns with an average price under £100,000 - 5 out of the 418 surveyed - below this benchmark compared with 14 one year ago and 130 in 2003. Two Fife towns – Kelty (£92,140) and Lochgelly (£93,731) – have the lowest average prices in the UK. Nelson in the North West (£99,117) and Peterlee in the North East (£97,174) have the lowest average prices in England. Greenock in Scotland (£97,304) is the fifth town in the UK to have an average price below £100,000.
Commenting on the housing market in the UK, Martin Ellis, Chief Economist, said:
'Towns in Scotland and Northern Ireland have seen the strongest house price rises in the UK over the past year, largely reflecting the more favourable housing affordability position in these two countries compared to the rest of the UK. Indeed, all ten towns delivering the strongest price rises over the past year have average house prices below the national average.
Sound fundamentals, underpinned by a strengthening economy, high levels of employment and low interest rates, will continue to support housing demand over the second half of 2006, ensuring that the market remains in good health. The annual rate of house price inflation, however, is expected to ease, partly because the corresponding figures last year were strong. Pressure on householders' fi
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