House price winners and losers

Which areas saw the biggest house price jumps last year, and where did prices slump?

The Land Registry released its December house price statistics last week, showing a modest 1.3% fall in property prices over the course of 2011 and no change in the monthly figures (from November to December). Not very exciting stuff and perhaps not indicative of where you and I live.

This is because, although average figures are all well and good, they mask huge variations in house price movements across the country.

Mini markets

The property market in England and Wales (the area covered by the Land Registry figures) is actually lots of little ‘micro markets’, all experiencing their own pressures and all behaving differently. London, for example, often moves ahead of the rest of the UK and usually proves more resilient, thanks to the help of overseas, high-end buyers.

Then there is a broad north/south divide - not only are house prices more expensive in the south, they are also currently performing better than in the north.

However, even within these sweeping statements you can find exceptions, emphasising that average figures should always be taken with a pinch of salt. They give you an idea of a rough overall trend, but if you are buying or selling a property it is much wiser to find out what is happening in your specific area.

For example, homeowners in Poole in Dorset are probably very pleased with how house prices moved in their area in 2011. They shot up by 4.3%, the biggest rise of any county or Unitary Authority in England and Wales.

It was quite a different story in Hartlepool, where prices fell by 17.5%, the biggest dip anywhere in England and Wales.

These huge contrasts from the average of 1.3% highlight the need to look local when you are trying to assess how house prices are moving.

Below is a series of tables I have put together from the latest Land Registry data, showing the performance of all the regions and then looking at the winners and losers at a more local level.

Capital appreciation

There was only one region that saw house price growth in 2011, and that was, unsurprisingly, London (which the Land Registry categorises as a region).

Everywhere else saw a drop in average house prices, with the steepest fall in the north east. Here prices slumped by a significant 7.1% over the year to £99,464, which is also the lowest regional average property price.

There was some positive news at the end of the year with a few regions showing a monthly rise in prices between November and December. The north west saw the largest monthly increase in prices of 1.5% during December. Of course, with transaction values currently low the monthly figures can be skewed quite easily, so this is not necessarily the start of an upward trend in prices.

It’s grim up north

The annual price movements for counties and Unitary Authorities perfectly illustrate the north/south divide. The best five performing are all in the south of England while the five that saw the greatest falls are all in northern England or Wales.

Top five annual increases

Top five annual losses

Metropolitan Districts slump

Not one Metropolitan District saw an increase in house prices during 2011, which is not that surprising given that they are all in the north or the midlands. The very worst performing districts were all in north-west England. However, interestingly, so were two of the best.

Best performing

Worst performing

Wide variations in London

London boroughs experienced some of the greatest rises in the country but there were still some falls, particularly in East London – not exactly the Olympic boost some might have expected!

Best performing

Worst performing

As you can see there is a massive difference in how house prices performed across England and Wales last year. So remember, next time you see a headline saying that prices are rising, or falling or static, don’t read too much into it. It is likely to be based on average figures for the UK or England and Wales and it may not represent what is happening on the ground where you are. If you want to find out about house price movements in your county or area, the latest house price data is available at http://www.landreg.gov.uk/house-prices.

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