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UK house price growth led by…

Tuesday 11th June 2013

The housing market in London, contrary to what some may think, did not record the greatest level of capital growth over the past decade.

Research shows that over ten years, Scotland is the biggest winner with 122% rise in property prices, while the North East, Wales and Yorkshire all outperformed London and the UK average property price rise of 72%.

As any property investor will know, residential property prices tend to move in cyclical cycles of boom, bust and stability, and although the first half of the past decade was buoyant fi the UK housing market, the latter half suffered as a consequence of the property crash, caused by the global financial crisis.

Over the last ten years, the North of England and Scotland were the clear winners of the property inflation lottery, with Scotland topping the charts with an increase in average property prices from £80,876 in 2002 to £179,446 in 2012, according to research by Hearthstone.

67% of people see their home as the place they live, not an investment

The study also revealed that 67% of people in UK do not consider their home to be an investment; however, more than half of those surveyed (51%) think their own property will increase in value over the next five years. Some 59% are confident that their region will see house price growth and 58% see positive house price changes for the UK as a whole which is in line with the view of many financial advisers.

The popularity of residential buy-to-let is supported by previous Hearthstone research that established that a large majority of people view residential property as a good long-term investment and most (4 to 1) prefer it to equities.

Christopher Down, CEO of Hearthstone Investments, commented: “The British have a long standing love affair with property but the strength of the market can hide problems in the detail. Traditional investment in residential property requires significant commitment in terms of finances and time and in many cases is limited to a particular region. Even investors with a large buy to let portfolio are often heavily invested and exposed to one specific region.

“Our review of the regional fluctuations over the last five and ten years illustrates that investors are potentially exposed to regional risks if assets are concentrated in only one area. Property prices are recovering from the credit crisis of 2008 but some regions have been affected more.”

 

Property Price Change

 

2012

2002

Change over 10 years

UK

£230,358

£134,373

£95,985 (71.4%)*

London

£388,049

£216,819

£171,230 (79.0%)

South East

£288,817

£185,231

£103,586 (55.9%)

South West

£224,332

£144,595

£99,737 (55.1%)

East

£246,871

£154,109

£92,762 (60.2 %)

East Midlands

£169,239

£108,698

£60,541 (55.7%)

West Midlands

£177,886

£112,633

£65,253 (57.9%)

Wales

£156,070

£71,854

£84,216 (80.4%)

Yorks & Humber

£161,396

£89,118

£72,278 (81.1%)

North East

£143,313

£77,225

£63,901 (85.6%)

North West

£159,291

£92,210

£67,081 (72.7%)

Scotland

£179,446

£80,876

£98,570 (121.9%)

Northern Ireland

£131,265

£94,120

£37,145 (39.5%)

Source: Office of National Statistics.

              

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