Towns with low unemployment see huge house price growth

House prices jump whopping £65,000 on average.

Areas with low levels of unemployment have seen enormous house price growth, according to new figures from Lloyds Bank.

Its study found that in the 20 areas of the country where unemployment is lowest, house prices are up £65,000 since 2009. In contrast, the 20 areas with the highest unemployment have seen house prices rise just £4,000 on average over the same period.

“There has been a very clear relationship between conditions in the local jobs market and house price performance during the period since the housing market downturn between 2007 and 2009,” said Andy Hulme, Lloyds Bank Mortgages Director.

“Those areas with low unemployment and high levels of employment have tended to record above average house price growth. Areas with high unemployment and relatively low employment have, on the other hand, typically underperformed.”

House prices in areas with low unemployment

Lloyds Bank have looked at areas with the highest, or lowest, number of people claiming job seekers’ allowance and compared it with house price movements.

Those areas with the lowest levels of unemployment since 2009 – measured by the number of people claiming job seekers’ allowance – have, on average, recorded bigger house price rises. The average house price rise in the 20 local authority districts with the lowest unemployment was 25% between March 2009 and March 2015.

In contrast the country as a whole has seen house prices rise by 17% over that period. Strip away the London housing market’s performance and the difference is even more noticeable. The UK, excluding London, recorded house price growth of 11% over that period.

Local Authority	Unemployment rate	Average house price March 2009	Average house price March 2015	Change
Hart	1.2%	£282,924	£374,937	£92,013 (33%)
Winchester	1.2%	£279,958	£383,946	£103,989 (37%)
North Dorset	1.2%	£206,384	£253,671	£47,287 (23%)
Mid Sussex	1.2%	£257,811	£336,217	£78,407 (30%)
Aberdeenshire	1.2%	£202,645	£235,667	£33,022 (16%)
Mole Valley	1.3%	£354,211	£478,599	£124,389 (35%)
West Dorset	1.3%	£234,911	£258,135	£23,223 (10%)
South Lakeland	1.3%	£186,376	£201,956	£15,580 (8%)
West Oxfordshire	1.3%	£221,545	£283,530	£61,985 (28%)
South Cambridgeshire	1.3%	£229,322	£338,694	£109,372 (48%)
Ribble Valley	1.3%	£197,713	£195,401	-£2,312 (-1%)
Waverley	1.3%	£348,184	£459,448	£111,264 (32%)
Wokingham	1.3%	£281,468	£371,051	£89,583 (32%)
Shetland Islands	1.3%	£128,795	£168,106	£39,311 (31%)
South Oxfordshire	1.3%	£303,371	£369,245	£65,874 (22%)
East Dorset	1.4%	£243,530	£286,844	£43,314 (18%)
Elmbridge	1.4%	£421,876	£586,605	£164,729 (39%)
Vale of White Horse	1.4%	£275,857	£318,472	£42,615 (15%)
Wealden	1.4%	£255,673	£290,202	£34,529 (14%)
South Northamptonshire	1.4%	£249,740	£267,232	£17,493 (7%)
Average	1.3%	£258,115	£322,898	£64,783 (25%)
Great Britain	3.4%	£184,411	£216,231	£31,819 (17%)
Great Britain (excluding G. London)	3.6%	£173,043	£192,509	£19,466 (11%)
Source: Lloyds Banking Group, ONS Compare mortgages with loveMONEY

House prices in areas with low unemployment

Meanwhile, the 20 areas with the highest unemployment levels saw growth of just 3% over the same period, as the table below demonstrates.

Local Authority	Unemployment rate	Average house price March 2009	Average house price March 2015	Change
City of Kingston upon Hull	7.7%	£105,812	£107,665	£1,854 (2%)
Middlesbrough	7.2%	£129,620	£130,508	£888 (1%)
Wolverhampton	6.9%	£131,354	£147,020	£15,666 (12%)
Blaenau Gwent	6.7%	£95,886	£99,229	£3,342 (3%)
Hartlepool	6.6%	£123,573	£135,067	£11,494 (9%)
Birmingham	6.6%	£141,924	£155,944	£14,021 (10%)
South Tyneside	6.4%	£133,685	£125,636	-£8,049 (-6%)
Sandwell	6.2%	£128,490	£127,399	-£1,091 (-1%)
Redcar and Cleveland	5.9%	£127,084	£145,215	£18,131 (14%)
North Ayrshire	5.9%	£134,974	£125,406	-£9,568 (-7%)
Liverpool	5.8%	£133,480	£142,766	£9,286 (7%)
Great Yarmouth	5.8%	£136,916	£156,598	£19,682 (14%)
Blackpool	5.8%	£114,458	£118,852	£4,395 (4%)
West Dunbartonshire	5.8%	£118,627	£111,589	-£7,038 (-6%)
North East Lincolnshire	5.8%	£114,204	£133,821	£19,617 (17%)
Knowsley	5.8%	£135,858	£122,450	-£13,407 (-10%)
Nottingham	5.7%	£111,418	£120,226	£8,808 (8%)
Walsall	5.6%	£149,306	£149,749	£443 (0%)
Glasgow City	5.4%	£143,621	£134,447	-£9,174 (-6%)
Merthyr Tydfil	5.4%	£105,403	£108,711	£3,309 (3%)
Average	6.2%	£125,785	£129,915	£4,130 (3%)
Source: Lloyds Banking Group, ONS

Other factors involved

Moving to an area of low unemployment doesn’t guarantee your house price will soar though. There are still other factors that affect how the local property market performs.

“The past few years have underlined the importance of local economic health in determining house price behaviour,” says Hulme. “Other factors, however, are also key drivers of house price trends including the strength, or otherwise, of housing supply.”

For example, Aberdeenshire has the same low unemployment level as Winchester, but its house prices are up just 16% to £235,667 from £202,645 in March 2009.

Similarly, Wolverhampton has the third highest number of people claiming unemployment benefits but house prices rose by 12% in the six years from March 2009 to £147,020.

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