Spa towns are attracting higher premiums
Owners of properties in spa towns across England and Wales have seen the value of their home rise by nearly £130,000 over the past decade, according to new research.
The average house price in 18 spa towns rose by £129,203 from £146,194 in 2001 to £275,397 in 2011, the Lloyds TSP Spa town Review shows. This 88% increase in the average property price is equivalent to a monthly rise of £1,077.
The rise in spa town house prices since 2001 was 12%, or £13,595, greater in monetary terms than the average increase in overall property prices across England and Wales which was £129,203 against £115,608.
It means that spa towns are attracting a premium of £48,000, almost double the average premium of £26,834 in 2001. Also 89% of spa towns have higher house prices than neighbouring locations.
The research also found that half of the eighteen spa towns have an average house price that exceeds £250,000. Epsom is the most expensive spa town with an average house price of £339,231, some 23% higher than the average spa town house price of £275,397. Tunbridge Wells has the second highest average house price at £326,753.
Ilkley is the most expensive spa town outside southern England with an average house price of £293,338. While Llandrindod Wells is the only spa town with an average house price that is below £180,000, at £155,469. Builth Wells has the next lowest average price at £183,050.
Five spa towns have seen house prices more than double in the past decade. The largest increases were in Builth Wells, up 170%, and Llandrindod Wells, up 109%. Harrogate in North Yorkshire saw the next biggest increase at 107%.
At the other end of the spectrum, Epsom in Surrey was up just 62% and the north Worcestershire town of Droitwich was up 72%.
As a result housing affordability in spa towns has deteriorated in the past ten years. Spa town house prices in 2011 are, on average, 8.3 times gross annual earnings. This is up from six times gross annual earnings in 2001.
‘Homes in spa towns continue to command a substantial premium over their neighbouring areas with the quality of life benefits and sense of history that typically characterise such locations still resonating amongst home buyers,’ said Suren Thiru, housing economist at Lloyds TSB.
‘However, as a consequence of rising property prices, housing market conditions in spa towns have become tougher over the past decade, particular for those looking to get on the property ladder for the first time,’ Thiru added.