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UK property market: focus on the South West of England

UK property market: focus on the South West of England

If pressed to select a single word to describe the South West of England, we would choose "diverse." As well as being endowed with such astonishing natural assets as Dartmoor, Exmoor and the Jurassic Coast, it boasts four World Heritage Sites and the enduringly fascinating cities of Bath, Cheltenham, Exeter and, of course, Bristol. However, as we discovered in our recent feature on the North East of England, being surrounded by spectacular countryside and having a rich heritage don't necessarily translate into an area commanding high house prices (see:https://nethouseprices.com/news/show/2497/uk-property-market-focus-on-the-north-east). But the South West fares better in this regard than its northerly counterpart, with its housing market currently outperforming most of the other regions of the UK. In this Nethouseprices feature, we look at property prices in this lovely corner of England and ask whether the present rate of growth is sustainable.

Property prices in the South West.

To put the figures for the South West into context, we first set out the salient overall data for house prices in the UK more generally. For these purposes, we use the latest Office for National Statistics (ONS) index, which itself is based on Land Registry sold prices.

A. UK

- Average house price = £226,367.
- Annual rate of growth = 5.4 per cent.

B. England

- Average house price = £243,945.
- Annual rate of growth = 5.7 per cent.

C. English regions

1. East Midlands

- Average house price = £184,399.
- Annual rate of growth = 6.4 per cent.

2. East of England

- Average house price = £289,300.
- Annual rate of growth = 5.9 per cent.

3. London

- Average house price = £483,563.
- Annual rate of growth = - 0.2 per cent.

4. North East of England

- Average house price = £130,271.
- Annual rate of growth = 4.4 per cent.

5. North West of England

- Average house price = £160,951.
- Annual rate of growth = 7.3 per cent.

6. South East of England

- Average house price = £324,465.
- Annual rate of growth = 5.5 per cent.

7. South West of England

- Average house price = £252,737.
- Annual rate of growth = 6.6 per cent.

8. West Midlands

- Average house price = £189,038.
- Annual rate of growth = 5.7 per cent.

9. Yorkshire and the Humber

- Average house price = £158,884.
- Annual rate of growth = 5.6 per cent.

Property price inflation in the South West as a whole, then, is being outpaced only by that in the North West. But when you delve a little deeper into the ONS house price index and examine the comparative growth figures for some of the region's local authorities, it becomes clear that the picture is much more nuanced. Consider the following examples:

1. Bath and North East Somerset

- Average house price = £329,299.
- Annual rate of growth = 3.2 per cent.

2. City of Bristol

- Average house price = £282,125.
- Annual rate of growth = 7.2 per cent.

3. City of Plymouth

- Average house price = £174,140.
- Annual rate of growth = 5.4 per cent.

4. Cornwall

- Average house price = £222,512.
- Annual rate of growth = 5.7 per cent.

5. Cotswolds

- Average house price = £361,503.
- Annual rate of growth = 3.0 per cent.

6. Dorset

- Average house price = £298,644.
- Annual rate of growth = 8.1 per cent.

7. East Devon

- Average house price = £281,056.
- Annual rate of growth = 8.1 per cent.

8. East Dorset

- Average house price = £363,474.
- Annual rate of growth = 10.3 per cent.

9. Gloucester

- Average house price = £197,123.
- Annual rate of growth = 9.0 per cent.

10. North Devon

- Average house price = £237,188.
- Annual rate of growth = 5.3 per cent.

11. North Dorset

- Average house price = £268,671.
- Annual rate of growth = 7.7 per cent.

12. South Hams

- Average house price = £298,835.
- Annual rate of growth = 2.2 per cent.

13. Wiltshire

- Average house price = £278,522.
- Annual rate of growth = 6.5 per cent.

Clearly, most of the South West is sustaining an uptick in housing market activity, but pockets of the region - like East Dorset, for example, and Gloucester - are enjoying a real boom. To put their performance into perspective, compare their figures with those of London and the South East, parts of the UK which typically race ahead of the rest when it comes to house price growth.

Going forward

The longevity of trends in UK property prices is hard to predict at the best of times, and the prevailing political and economic uncertainty render it virtually impossible. Short term risk factors to growth in the South West are the same as those facing the rest of the country - a poor Brexit settlement deal and yet another general election. This being said, house prices in the UK have, at least to date, shrugged off the shocks of recent times, partly because stocks of housing are so low, most notably in hugely desirable regions like the South West. Against this backdrop, it seems likely that prices will continue to rise, irrespective of external factors, in the coming months.

For longer term projections, we consulted the latest Barclays Property Predictor, a tool which predicts property market patterns in the next five years. As discussed in our article https://nethouseprices.com/news/show/2477/uk-property-prices-next-five-years-part-3, Barclays envisages growth of some 5.31 per cent for the South West between now and 2021. It bases this forecast on several factors. Firstly, a strong local economy will be supported going forward by the vibrant business start-up scene. Secondly, the jobs market in the region is growing. Finally, demand for second homes will sustain upward momentum.

We hope you have found this article interesting. Visit us again soon for features on the North West of England and on Aberdeen, Edinburgh and Glasgow, as well as our coverage of house prices in the UK at large.

We hope you have found this Nethouseprices feature useful and that we will see you again soon for our updates on house prices in the UK, the private rental sector and housing policy.

You can also sign up to our newsletter and join Nethouseprice’s community of over 190,000 members who get regular property tips, relevant offers and news, click here  http://nethouseprices.com/auth/user-register

Source: Nethouseprices.com 05.12.17

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