City house prices outperform UK average over past decade
Cities have typically recorded higher house price growth than the UK average over the past 10 with the majority also outperforming their region, new research shows. Cities have also done well in relative terms since the housing market peaked in 2007, recording an average fall of 17% compared with the UK average decline of 23%, the research from the Halifax shows.
Prices in cities increased by an average of 38% from £125,276 in 2002 to £173,322 in 2012 and this exceeded the 29% rise for the UK as a whole. 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.
Scottish cities Aberdeen (94%) and Inverness (81%) recorded the biggest price rises between 2002 and 2012 with two other Scottish cities, Dundee (73%) and Perth (70%), also feature in the top five.
Martin Ellis, housing economist at the Halifax said that 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 a particularly sharp price increases due to the importance of the oil sector to the local economy.
Quote from PropertyCommunity.com : “Can anyone suggest where I should be looking in terms of towns and cities in the UK that offer the best potential long term growth.”
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 decade. In addition, average prices in Bradford and Hull are relatively low, both are amongst the five cities in the UK with the lowest average prices, providing the potential for stronger gains than cities with higher prices. All 10 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 10 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.
Cities have done well in relative terms in the five years since the housing market peaked in 2007, with house prices in cities falling by an average of 17% since 2007 compared with the UK average decline of 23%. Some 70% of cities recorded a better house price performance than their region between 2007 and 2012. Since 2000, 11 towns have become cities and 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 nine 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 and 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.