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Spa towns see house prices jump £1,000 a month

Christina Jordan
by Lovemoney Staff Christina Jordan on 08 March 2012  |  Comments 2 comments

Spa towns have seen huge house price growth, and there's little sign of this bubble popping!

Spa towns see house prices jump £1,000 a month

House prices in spa towns have been among the most buoyant in England and Wales over the last ten years, according to new research from Lloyds TSB.

Homeowners in these desirable towns have seen the value of their properties rise by almost £130,000 in the last decade, from an average of £146,194 in November 2001 to £275,397 in 2011.

This enormous 88% increase is equivalent to a monthly rise in prices of £1,077. 

In addition, spa towns command a significant premium on their neighbouring areas, creating property bubbles in these often swanky enclaves.

Double bubble

In five spa towns house prices have more than doubled in the last ten years alone.

By far the largest increase was in Builth Wells in Powys, mid-Wales, where prices swelled 170%. Nearby spa town Llandrindod Wells saw the second biggest boost with a 109% rise.

At the other end of the scale was Epsom in Surrey, which saw the smallest increase in house prices (62%) of any spa town in England and Wales in the last ten years.

Indeed, there is a clear north/south divide in the fortunes of spa towns, with northern and Welsh towns experiencing enormous price rises, compared to more modest increases in the south.

Of course, this is probably related to the much lower bases that the northern and Welsh spa towns started from in relation to their southern counterparts.

When you look at Epsom, for example, which saw the smallest rise, it is still the most expensive spa town in the country, with an average house price of £339,231.

And despite having seen the biggest jumps in ten years, Llandrindod Wells and Builth Wells have the two lowest spa town prices in England and Wales at £155,469 and £183,050 respectively:

Spa towns: biggest risers

Spa Town

County

Average House Price  2001 (£)

Average House Price  2011 (£)

Ten year £ change

Ten year % change

Builth Wells

Powys

67,819

183,050

115,230

170%

Llandrindod Wells

Powys

74,281

155,469

81,188

109%

Harrogate

North Yorkshire

127,386

264,113

136,727

107%

Buxton

Derbyshire

91,494

187,886

96,391

105%

Boston Spa

West Yorkshire

136,873

277,584

140,710

103%

Source: Land Registry, Lloyds TSB

The spa town premium

Prices in spa towns are not just high, they are also particularly pricey compared to their surrounding areas – creating real property bubbles.

Buyers have to fork out an extra £48,123, on average, to live in a desirable spa town, with prices 27% higher than the average house price in their county.

And while spa towns have always commanded a hefty price tag this premium has almost doubled in the last ten years, from an average premium of £26,834 in 2001.

The biggest spa town premium is paid by purchasers in affluent Ilkley in west Yorkshire, where buyers have to pay an eye-watering £143,388 extra to live there compared to surrounding areas. Now that is a property bubble!

Boston Spa is similarly fizzy, with house prices on average £127,634 higher than neighbouring parts of west Yorkshire.

The table below highlights the five biggest property premiums paid in spa towns in England and Wales:

Spa Town

County

Average House Price (£)

Average House Price in County  (£)

Premium to County  £

Premium to County  %

Ilkley

West Yorkshire

293,338

149,950

143,388

96%

Boston Spa

West Yorkshire

277,584

149,950

127,634

85%

Bath

Somerset

316,125

206,450

109,675

53%

Church Stretton

Shropshire

272,576

187,854

84,722

45%

Tunbridge Wells

Kent

326,753

243,123

83,630

34%

Source: Land Registry, Lloyds TSB

L’eau affordability

While high property prices are great for those lucky enough to already own a home in a spa town, they do have a debilitating impact on younger people in those areas who are looking to get onto the housing ladder.

In fact, half of the 18 spa towns have an average house price that exceeds £250,000.

When you consider that most mortgage lenders require at least a 10% deposit, £25,000 is a steep sum to save for many first-time buyers. Even if you managed it you would still need a pretty hefty income for a lender to offer you a £225,000 mortgage.

If you are planning a purchase in a spa town, or in an equally lovely area without its own spring water, below are some of the best mortgage deals available right now:

15 fab fixes

LENDER

TYPE OF DEAL

RATE

FEE

MAX LTV

HSBC

2-year fix

2.54%

£1,999

60%

Chelsea BS

2-year fix

2.64%

£1,995

70%

Market Harborough BS

2-year fix

2.69%

£1,595

75%

Chelsea BS

3-year fix

2.79%

£1,995

70%

Yorkshire BS

2-year fix

2.79%

£995

75%

Norwich & Peterborough BS

2-year fix

3.09%

£295

75%

Chelsea BS

5-year fix

3.19%

£1,495

70%

First Direct

5-year fix

3.24%

£1,999

65%

Post Office

5-year fix

3.38%

£995

75%

Hanley Economic BS

2-year fix

3.34%

£495

85%

Post Office

2-year fix

3.85%

£995

85%

Market Harborough BS

5-year fix

3.99%

£245

80%

First Direct

2-year fix

4.19%

£999

90%

Yorkshire BS

5-year fix

4.19%

£995

85%

Yorkshire BS

5-year fix

4.79%

£995

90%

10 top variable deals

LENDER

TYPE OF DEAL

RATE

FEE

MAX LTV

HSBC

2-year discount

1.99%

£1,499

60%

First Direct

2-year tracker

1.99%

£1,499

65%

Leeds BS

2-year discount

2.45%

£999

75%

Chelsea BS

2-year tracker

2.39%

£1,495

70%

HSBC

Term tracker

2.39%

£999

60%

Yorkshire BS

2-year tracker

2.49%

£995

75%

Post Office

2-year tracker

2.49%

£995

65%

Darlington BS

2-year discount

3.14%

Fee-free

85%

Share to Buy (from Britannia BS)

Term discount

3.79%

Fee-free

90%

HSBC

Term tracker

4.59%

£599

90%

More: Cost of mortgage repayments falling | How to stand the best chance of getting a mortgage

Use lovemoney.com's innovative new mortgage tool now to find the best mortgage for you online

At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 8045 or email mortgages@lovemoney.com for more help.

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article.

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.

Your home or property may be repossessed if you do not keep up repayments on your mortgage

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Comments (2)

  • electricblue
    Love rating 769
    electricblue said

    Ilkley is packed with nuisance tourists in summer and bleak as hell in winter. The scenery is spectacular but not more so than much of the rest of Yorkshire. It's not native Yorkshire folk who want to retire there and bump up prices, it's delusional Southerners who haven't taken the trouble to explore outside the tourist centres. Boston Spa isn't anything to get excited about either.

    Report on 08 March 2012  |  Love thisLove  0 loves
  • PDB11
    Love rating 75
    PDB11 said

    No offence to you Yorkshire folk - some of my best friends are from Yorkshire - but I don't want to retire to Yorkshire. I want to go home to Somerset.

    Bath isn't like Electricblue's description of Ilkley - the same as the rest of the county, just more expensive and with more tourists. It's an amazing town, not like any other. And it's not only Bath that's as expensive as a home counties spa: Somerset is expensive everywhere, even the industrial towns (not that there's much industry left in Somerset.) This is a major problem for locals who need new homes.

    Talking of tourists, though, I still remember growing up in Wookey when there used to be a regular stream of tourists who had to be told, No, Wookey doesn't have caves, those are at Wookey Hole, it's the next village, two miles that way... Brown signposts have helped enormously.

    Report on 09 March 2012  |  Love thisLove  0 loves

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