Regional property prices - back to 'bubble' growth?

publication date: Feb 27, 2014
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Regional property prices - back to 'bubble' growth?

What’s happening to property prices regionally in December 2013?

Regional Averages – England & Wales Summary (see chart below)

  • Only London has recovered to 2007/8 heights. The annual average growth 2013 vs 2012 is normal   
  • North East and West, Yorkshire and Humber property prices are still 20% below 2007/8 heights
  • The South East, Midlands and Wales are still down against the previous peak by 10 to 16%

Kate’s key question answered: Are London prices really rising unsustainably as an asset? 

London prices continue to rise, BUT, when you take into account inflation @3%, London prices have not, on average, kept up with inflation, so cash investors IN REAL TERMS are still losing money!

Are we really back to ‘bubble’ growth?

The blue column in the chart below shows how much property prices have grown annually since 2000. This increases ranges from 7-9% in most regions while London increases by 11%. During the ‘bubble’ days property prices grew by 25 to 30% year on year. It is a false claim to call current market growth a ‘bubble’ as they are below normal. 

For charts - download Kate Faulkner's full report here

Scottish index suggests average prices are rising and house sales levels are continuing to increase.  Gordan Fowlis, Regional Managing Director of Your Move, part of LSL, comments: “The recovery of the Scottish housing market is bouncing ahead, with price rises moving past those seen in every other region in Great Britain aside from London and the South East. Average prices are now £5,131 higher than the same time last year, propelled forward by a significant number of sales. In fact, December saw the greatest number of homes change hands in a single month since July 2008, and 27% more sales than a year ago.”

For charts - download Kate Faulkner's full report here

Property prices in Northern Ireland continue to struggle being down 47% versus the 2007/08 high. Whilst this remains perhaps not such good news for sellers that bought their properties around five years ago, this could be the time for potential purchasers to revisit their options and look at getting on the property ladder versus renting. 

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