The Housing Boom: Part Two

Here's part two of our regional review of the property boom. These were the good times for homeowners!

In the first part of this article, I looked at the UK's twelve-year house price surge. For the record, here's how the boom looked for the nation as a whole:

Average UK house price, 1995-2007

I've already reviewed six regions of the UK; here are the remaining six:

South East House Prices

The South East has enjoyed a longer boom, lasting just one quarter short of fifteen years. However, over this period, prices have risen by a more leisurely 9% a year. Nevertheless, they peaked in the autumn and fell by 2.3% in the last three months of 2007.

South West House Prices

In identical fashion to the neighbouring South East, the South West has enjoyed a 14_-year boom since the end of 1992. However, prices have risen by just under 9% a year over this period, and fell by a modest 0.4% in Q4 2007.

Scotland House Prices

Scotland largely dodged the last property bust, with modest price declines but no strong downward trend. Still, let's look how Scots house prices have fared since the UK's resurgence in late 1995:

The average property in Scotland now costs over 2½ times what it did in late 1995, with prices increasing by a mere 8% a year over this period. Then again, wages are significantly lower in Scotland than in England, so we'll see how house prices fare north of the border in 2008.

West Midlands House Prices

The West Midlands failed to keep pace with the rest of the UK, with prices rising 9.3% a year over 12½ years. Nonetheless, the average price today is three times what it was in early 1995.

Wales House Prices

Wales has had a shorter, sharper boom than elsewhere in the UK, with prices rising almost 11% a year for 11_ years. Note that Welsh property prices peaked much earlier. They hit a high in the first quarter of 2007, slipped in the spring and then crept up in the second half of the year.

Yorkshire & Humberside House Prices

Prices tripled over the above twelve-year period, rising by 9.5% a year, but underperforming the UK as a whole.

So, there you have it: how each region of the UK has performed during this housing boom. There are some notable differences between regional growth rates. Northern Ireland tops our table with growth of 14.9% a year for nearly twelve years. At the other end of the scale, Scotland saw yearly growth of 7.9% for just over twelve years.

Finally, history suggests that the faster risers also become the steepest fallers, thanks to the `Icarus syndrome'. Therefore, house prices in Northern Ireland and Wales look particularly vulnerable to me. Then again, after taking local incomes into account, no UK region looks fairly valued on traditional measures. Thus, we could all get wet when house prices take a bath!

More: Find your ideal mortgage via the Fool | How Often Do House Prices Fall? | House Prices And The Double-Edged Sword