Westminster most expensive UK city
Property prices in UK cities have increased by £131 a week over the last decade with Westminster named as the most expensive UK city followed by Winchester and St Albans.
An average house price in Westminster is £570,964, in Winchester it is £363,556 and in St Albans it is £337,660, research from the Halifax shows.
All ten of the most expensive cities in England are in the south. Edinburgh is the most expensive city outside southern England with an average house price of £206,303.
Salford in Manchester is the least expensive UK city with an average house price of £105,833, followed by Londonderry at £106,299. Portsmouth at £141,871 is the most inexpensive city in southern England.
The Halifax Cities Review tracks house price movements in 59 cities in the UK. The review is based on the Halifax’s own housing statistics database. There are 66 official cities in the UK. City of London, Wells, Armagh, Ripon, St Davids, Newry and Bangor have been excluded from the analysis due to an insufficient sample size.
The research also shows that the premium that home buyers are required to pay to live in one of the UK’s cities has risen to its highest level on record. House prices in cities across the UK are, on average, 7% or £14,462, higher than their county average, the highest premium since Halifax records began in 1983.
The premium for City living relative to surrounding areas is highest in southern England. The majority, 56%, of UK cities have a higher average house price than their county average. Seven of the 10 cities with the highest premium are in the south.
Winchester has the largest premium with houses trading at 77% above the average house price in Hampshire. Westminster has the next highest premium with prices 74% above the Greater London average. Lichfield in Staffordshire has the highest premium at 58% outside southern England.
However, there are some notable exceptions to this with the three cities that are most affordable relative to their county average also located in southern England, that is Portsmouth, Gloucester and Plymouth. The city with the biggest discount to its county average is Portsmouth, where the average house price of £141,871 is 31% (£63,344) below the Hampshire average.
The average house price across the tracked UK cities3 rose by 65% (£68,236) over the past decade, moving from £104,681 in August 2001 to £172,917 in August 2011, equivalent to a weekly increase of £131. House prices across the UK as a whole increased by 56% over the same period.
Inverness, awarded city status in 2000 to mark the new millennium, recorded the highest rise in house prices over the decade at 148%, followed by Truro at 121% and Hull at 119%. Nine of the 10 cities with the strongest house price growth are outside southern England.
House prices in city locations also experienced smaller house price falls during the downturn in the housing market. City property prices fell, on average, by 17% between 2007 and 2009 compared to an overall fall of 24% across the UK. Over the past year, city house prices have declined by 2.5%, lower than the 4.3% drop in the average UK house price.
Affordability in cities has declined over the last 10 years. The typical city home is 5.2 times average gross annual earnings in 2011, up from an average multiple of 4.8 in 2001, demonstrating how prices have risen more rapidly than earnings. There has, however, been a recent improvement in affordability with the average price to earnings ratio falling from a peak of 7.4 in 2007.
‘With the housing demand and supply imbalance that characterises the UK property market often more acute within our major urban conurbations, homes in cities across the country are typically trading at a marked premium over neighbouring areas. City house prices are generally supported by demand from those looking to gain from the economic and lifestyle benefits often associated with residing in major urban areas, as well as by the pressures on the housing supply that often typify such locations,’ said Suren Thiru, housing economist at the Halifax.