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House prices: Best and worst performing UK areas in 2011

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We reveal the best and worst performing areas in the UK for rising house prices in 2011...


With the year almost over, it's time to take a look at what happened to prices in 2011.

As I have regional data only on a quarterly basis, I will review results for the 12 months to 30 September 2011. Given the slow state of the property market, these should be largely in line with the results for 2011 as a whole.

Let's begin by looking at the overall picture, using the Halifax House Price Index (HPI):

UK average house price

Quarter

House

price

Q3/2010

£166,961

Q3/2011

£163,154

Difference

£3,807

Difference

-2.3%

Source: Halifax HPI, Quarterly data by region, seasonally unadjusted

As you can see, the price of a typical home in the UK has dipped by almost £4,000 in 12 months. This is an average fall of 2.3%, which is much less than the steep falls seen between mid-2007 and the spring of 2009, when prices started to bounce back.

Where have house prices risen the most?

Averages invite comparisons, so let's see what's changed across the 12 regions of the UK. I've ranked these results from highest gain to largest loss:

1. East Anglia

Quarter

House

price

Q3/2010

£155,185

Q3/2011

£165,045

Difference

£9,860

Difference

6.4%

Londoners may be surprised to learn that prices didn't rise fastest in their great city. In fact, East Anglia pipped the capital to the post, with the price of an average home rising by nearly £10,000 (6.4%) in 12 months. Perhaps London commuters still see East Anglia as an attractively priced place to buy a home?

2. Wales

Quarter

House

price

Q3/2010

£134,539

Q3/2011

£139,971

Difference

£5,432

Difference

4.0%

In second place is Wales, with prices up by over £5,400 (4%) in 12 months to nearly £140,000. With property prices below the UK average, Wales has rebounded stronger than most regions in 2011.

3. North West

Quarter

House

price

Q3/2010

£122,953

Q3/2011

£126,325

Difference

£3,372

Difference

2.7%

Again, with the typical home priced well below the UK average, the 2.7% rebound in house prices in the North West of England secures it third place.

4. Greater London

Quarter

House

price

Q3/2010

£257,319

Q3/2011

£262,479

Difference

£5,160

Difference

2.0%

Despite costing almost £100,000 more than the UK average, the average price of a home in the UK's largest city rose by over £5,000 (2%) in 12 months.

Where have house prices fallen the most?

That's the end of the risers. Now let's discover the eight regions where prices fell in the year ending September 2011:

1. Scotland

Quarter

House

price

Q3/2010

£121,060

Q3/2011

£119,768

Difference

-£1,292

Difference

-1.1%

Prices in Scotland slipped by 1.1%, pushing the average price below £120,000, which is more than a quarter (nearly 27%) less than the UK average.

2. South East

Quarter

House

price

Q3/2010

£227,218

Q3/2011

£224,183

Difference

-£3,035

Difference

-1.3%

Prices in the affluent South East fell modestly: down just over £3,000 (1.3%), but still more than £60,000 above the UK average.

3. North

Quarter

House

price

Q3/2010

£125,250

Q3/2011

£122,002

Difference

-£3,248

Difference

-2.6%

Prices slipped by more than £3,200 (2.6%) in the North of England, in sharp contrast to the 2.7% rise recorded in the North West.

4. West Midlands

Quarter

House

price

Q3/2010

£154,449

Q3/2011

£149,830

Difference

-£4,619

Difference

-3.0%

The average price dropped over £4,600 to dip below £150,000 in the West Midlands, down 3%.

5. Yorkshire and the Humber

Quarter

House

price

Q3/2010

£125,386

Q3/2011

£120,757

Difference

-£4,629

Difference

-3.7%

In Yorkshire and the Humber, prices dipped over £4,600, down 3.7% in 12 months.

6. East Midlands

Quarter

House

price

Q3/2010

£146,405

Q3/2011

£140,663

Difference

-£5,742

Difference

-3.9%

In the East Midlands, prices dipped nearly 4%, with the typical home losing over £5,700 in value.

Lastly, we're into two areas where the house-price crash appears still to be in full swing:

7. South West

Quarter

House

price

Q3/2010

£196,157

Q3/2011

£178,116

Difference

-£18,041

Difference

-9.2%

I've long warned that prices in the South West (particularly in Devon and Cornwall) were way out of line with local incomes. Indeed, the price of the typical home here dived by over £18,000 (9.2%) in the past 12 months.

8. Northern Ireland

Quarter

House

price

Q3/2010

£128,731

Q3/2011

£109,743

Difference

-£18,988

Difference

-14.8%

After a huge boom caused by the end of the Troubles (Anglo-Irish hostilities) and the Celtic Tiger economy of the Republic of Ireland, house prices in Northern Ireland came crashing back to earth. Most recently, they have plunged nearly £19,000 (14.8%) to drop below £110,000. This makes the Six Counties the cheapest place to buy a home in the UK.

What's the lesson here?

As always, the most important lesson is that property markets are local, so what's happening in your neighbourhood, town, city or county may not be replicated in the rest of the country, and vice versa.

For example, while prices have been falling steeply in Northern Ireland and the South West, they have been creeping up in East Anglia, Wales, the North West and Greater London.

Even so, outside of these four recovering areas, prices are declining in the rest of the UK. They are being driven down by a four-year mortgage famine, rising unemployment, falling disposable incomes and poor consumer confidence.

To be honest, I expect these negative themes to continue well into next year, so don't put your hopes on any sudden rebound in UK house prices any time soon!

More: Compare the best mortgages at lovemoney.com

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