House prices rise more in high-employment areas
New research released today from Lloyds Bank has indicated that house prices seem to grow quicker in UK areas where employment is at its highest.
According to the research, the ten regions of the country with the most people in work have seen the average cost of a property rise by 23% since 2009. This is in comparison to 17% for the nation as a whole.[1]
Working Rewards
Removing London from the findings gives an even more definite look to the difference between areas. The average home value in the UK has risen by 11% when the capital is not considered within the results. None of the top places for unemployment were found to be in Greater London.
Two of the regions with the UK’s highest employment rate were Hart and Winchester in Hampshire, which saw property values grow by 33% and 37% respectively during the last five years. [1]
Within the three areas with the most unemployment-Hull, Middlesbrough and Wolverhampton-increases were much lower, at just 2%, 1% and 12% respectively. Other areas with high unemployment, such as Walsall in the West Midlands, have seen no change in the cost of house prices since 2009. Areas such as South Tyneside have actually recorded a drop during the same period.
House prices rise more in high-employment areas
Clear Relationship
Andy Hulme, Lloyds Bank mortgages director, noted that, ‘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.’
‘The past few years have underlined the importance of local economic health in determining house price behaviour, he added.[1]
This certainly seems to be the case when the top twenty areas for both high and low employment are considered. For the twenty areas with the largest employment rate, average property prices have increased by 25% since 2009. In the twenty regions where employment is low, the average increase has been just 3%[1]
[1] http://www.rman.co.uk/latest-news/article/high-employment-areas-have-seen-house-prices-rise-most