The last housing crash, Part 2

Here's part two of our region-by-region review of the Nineties property slump. Brace yourselves!

In the first part of this article, I looked at how the last property crash panned out across the UK and in six of its twelve regions. For the record, here's how the average price fell over the entire nation:

*High/Low*	*House price (£)*
Q2 1989	69,850
Q3 1995	61,115
Difference (£)	-8,735
Change (%)	-12.5

Now let's look at the highs and lows of the remaining six regions:

South East

*High/Low*	*House price (£)*
Q1 1989	106,179
Q4 1992	73,556
Difference (£)	-32,623
Change (%)	-30.7

It may come as a surprise to many people in the affluent South East just how steeply prices fell in the last bust. In under four years, prices dropped by more than three-tenths (31%), plunging many homeowners into negative equity (when a property is worth less than the mortgage secured on it). So much for the South East being a safe haven when times are tough!

South West

*High/Low*	*House price (£)*
Q1 1989	85,634
Q4 1992	60,522
Difference (£)	-25,112
Change (%)	-29.3

The South West followed an identical path to its neighbour the South East, peaking in early 1989 and bottoming out at the end of 1992. However, house prices fell slightly less in percentage terms, but were still down nearly three-tenths (29%) in the Nineties collapse.

Scotland

Like Northern Ireland, Scotland pretty much avoided the last property plunge. Sure, prices wobbled about a bit throughout the Nineties, but the trend never headed resolutely downwards. For the record, prices declined as follows:

*Year*	*Annual* *decline (%)*
1992	-3.0
1994	-0.1
1997	-2.1
2000	-4.3

So, Scots managed to avoid the worst of the UK property depression, but this may not happen again this time around.

West Midlands

*High/Low*	*House price (£)*
Q2 1989	68,931
Q2 1995	60,441
Difference (£)	-8,490
Change (%)	-12.3

Of all the regions of the UK, the West Midlands most closely reflects the results for the property market as a whole. Prices fell closely in line with the UK average, making this region perhaps the most ‘average' of all during the last crash.

Wales

*High/Low*	*House price (£)*
Q1 1990	57,453
Q2 1995	49,674
Difference (£)	-7,779
Change (%)	-13.5

Prices didn't peak in Wales until Spring 1990, and then fell slightly more than the UK as a whole until they began to recover in late 1995. There's nothing remarkable to report here.

Yorkshire & Humberside

*High/Low*	*House price (£)*
Q1 1991	55,928
Q3 1995	50,249
Difference (£)	-5,679
Change (%)	-10.2

Lastly, we come to the twelfth of our regions. Yorkshire folk have a well-deserved reputation for financial prudence. This may explains why Y&H it performed much better than any other English region, with prices declining by little more than a tenth (10%).

So, what conclusions can we draw from the above data? All it tells us is that the UK is far from being a single, homogeneous housing market. Regional differences will always prevail, because housing markets are primarily local beasts. Furthermore, this look back at the past doesn't help us to forecast the future. Then again, as Mark Twain is said to have remarked,

"History does not repeat itself, but it does rhyme."

More: Find your ideal mortgage via lovemoney.com | House prices double every 7 years?