Part One: the star performers
The stellar performance of some UK cities generated much media comment last year, not least because so many of them consistently eclipsed London in terms of house price growth. The reasons for Manchester, Birmingham, Edinburgh, Glasgow and several other great cities outpacing the capital have been explored at length and they mostly boil down to aspiring homeowners and investors alike seeking better value for their money than London can currently offer. But what of the country's smaller urban areas? How are towns across Britain faring? Well, according to a recent Halifax study, some of them - principally in the South West of England - are recording astonishing rates of growth. Cheltenham in Gloucestershire, for instance, saw the average cost of a home rise by 13.0 per cent in the year to November 2017. Other towns, most of them in Scotland and Yorkshire and the Humber, reported rather troubling declines. In this two-part Nethouseprices feature, we look first at the star performers and ask why they are racing ahead of the pack.
Top ten 2017
The following are the top ten performing towns according to Halifax, Britain's biggest mortgage lender. The data was collated using its index of house prices in the UK and is based on crude averages of prices in 119 postcodes, including 24 London boroughs.
1. Cheltenham - South West England
Average cost of a house November 2017 = £313,150
Average cost of a house November 2016 = £277,188.
Cost change = £36,033.
Annual rate of growth = 13.0 per cent.
2. Bournemouth - South West England
Average cost of a house November 2017 = £273,687.
Average cost of a house November 2016 = £245,099.
Cost change = £28,589.
Annual rate of growth = 11.7 per cent.
3. Brighton - South East England
Average cost of a house November 2017 = £374,662.
Average cost of a house November 2016 = £336,374.
Cost change = £38,289.
Annual rate of growth = 11.4 per cent.
4. Crawley, South East England
Average cost of a house November 2017 = £323,660.
Average cost of a house November 2016 = £293,105.
Cost change = £30,555.
Annual rate of growth = 10.4 per cent.
5. Newham, Greater London
Average cost of a house November 2017 = £402,781.
Average cost of a house November 2016 = £365,438.
Cost change = £37,344.
Annual rate of growth = 10.2 per cent.
6. Peterborough, East Anglia
Average cost of a house November 2017 = £220,623
Average cost of a house November 2016 = £200,309.
Cost change = £20,314.
Annual rate of growth = 10.1 per cent.
7. Gloucester, South West England
Average cost of a house November 2017 = £231,581.
Average cost of a house November 2016 = £211,429.
Cost change = £20,152.
Annual rate of growth = 9.5 per cent.
8. Huddersfield, Yorkshire and the Humber
Average cost of a house November 2017 = £186,988.
Average cost of a house November 2016 = £177,007.
Cost change = £15,981.
Annual rate of growth = 9.3 per cent.
9. Exeter, South West England
Average cost of a house November 2017 = £273,874.
Average cost of a house November 2016 = £251,085.
Cost change = £22,789.
Annual rate of growth = 9.1 per cent.
10. Nottingham, East Midlands
Average cost of a house November 2017 = £193,397.
Average cost of a house November 2016 = £177,513.
Cost change = £15,844.
Annual rate of growth = 8.9 per cent.
Average cost of a house November 2017 = £254,609.
Average cost of a house November 2016 = £247,933.
Cost change = £6,777.
Annual rate of growth = 2.7 per cent.
Best of the rest
11. Gravesend, South East England - 8.8 per cent growth
12. Lincoln, East Midlands - 8.4 per cent growth.
13. Stockport, North West England - 8.2 per cent growth.
14. Swindon, South West England - 7.8 per cent growth.
15. Redbridge, Greater London - 7.7 per cent growth.
16. Swansea, Wales - 7.7 per cent growth.
17. Barnet, Greater London - 7.7 per cent growth.
18. Richmond Upon Thames, Greater London - 7.6 per cent growth.
19. Portsmouth, South East England - 7.5 per cent growth.
20. Grays, South East England - 7.5 per cent growth.
Arguably, the most salient feature of the table is the comparative absence of locations within London and the South East. True, both are represented on the list, but at nowhere near their usual frequency. At one level, this is unsurprising: that these areas had a quiet year by their own standards is well known. What is perhaps more striking is that it isn't just the high profile northern cities which are flourishing while London flounders. |Smaller towns up and down the country are clearly prospering, too.
Why are such towns as Cheltenham, Bournemouth and Brighton doing so well? We think there are four key reasons. Firstly, each of them enjoys a booming local economy, with strong jobs market growth and relatively high wages - features which typically support property prices. Secondly, as well as being vibrant towns and boasting superb opportunities and attractions in their own right, they have excellent communications and transport links with London. Put simply, the lucky residents of these places can have the best of both worlds. Thirdly, while their residential property is expensive by UK standards, it is much more affordable than in parts of London. Accordingly, there is space for their house prices to rise. And finally, some of the listed locations are popular sites for second homes, a characteristic which is usually accompanied by higher than average property prices.
One of our current mantras is that these are uncertain times, and making predictions about the probable direction of house prices in the UK is fraught with difficulty. This being said, there is no obvious reason for imagining that these towns will experience a dramatic slowdown in the coming year. The team at Nethouseprices will, of course, continue to monitor these markets and will update you on developments from time to time. In the meantime,we recommend that you carry out careful research about any area where you plan to buy a home, whether for your own use or for investment purposes, because prices can fall.
In the next instalment, we will set out the worst performing towns. Visit us again soon for this and for our other services, including our free instant house valuation tool.
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