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The town where house prices jumped 207%

Published 4 February 2010 in Make good property decisions

John Fitzsimons

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11 comments

The last decade may have ended in a turbulent fashion for the property market, but according to the latest Halifax house price index UK property values still rose by an almighty 105% over the course of ten years.

That represents the biggest rise in real terms of any other decade since the 1950s - not bad when you consider that house prices fell 20% between 2007 and 2009.

So which towns have been the biggest winners of this phenomenal growth?

House prices up 207%!

If you live in the town of Redruth in Cornwall (or just own a property there) then you will be absolutely laughing - since the end of 1999, house prices in the town have jumped a frankly astonishing 207%. That represents a rise in average house prices from just £59,372 at the start of the decade to £182,173 currently .

Cornwall clearly represented great value in terms of house prices at the turn of the millennium, with Penzance seeing the second largest growth in property values (188%) and Helston in fourth spot (174%).

Here's the top five in full:

Town	Region	Average house price in Q4 1999	Average house price in Q4 2009	Increase
Redruth	Cornwall	£59,371	£182,173	207%
Penzance	Cornwall	£71,058	£204,470	188%
Ramsgate	Kent	£59,979	£168,300	181%
Helston	Cornwall	£83,943	£230,270	174%
Wallasey	Merseyside	£50,785	£138,292	172%

Why the huge rise?

So why did these towns see such phenomenal growth?

One point that Halifax was keen to stress was that most of the best-performing towns began the decade with prices noticeably lower than the national average at that time of £81,596. This is of course a fundamental point if you are hoping to make some serious cash from the value of your property - you need to unearth a bargain.

In addition, each of the top ten towns are either on, or very close to, the coast. Clearly the Noughties saw demand for living by the seaside skyrocket!

Living by the sea has long been seen as a real luxury, and it's unlikely that will change any time soon (climate change allowing!) so purchasing property at least near to a coastline probably presents an opportunity for growth in the value of your home.

A future of house price falls?

Obviously this is all great news if you happened to buy a house in Redruth in October 1999, but what can the rest of us expect from house prices in the next decade? Has the bubble well and truly burst?

Personally, I'm not convinced it has, though I'd be astonished if any town in the UK saw such phenomenal house price growth by the final quarter of 2019.

Things might be a little tricky for a year or so, particularly with the economy remaining on life support, but I still think the fundamentals of the UK housing market - the severe lack of supply, the British obsession with home ownership, and the growing population - will result in house price growth over the next ten years.

If the mortgage market recovers sufficiently for some truly competitive first-time buyer tailored products to be launched, then house prices could really jump again.

Of course I could be wrong. Our poll of lovemoney.com readers and their predictions for house prices last year suggested there are further falls around the corner. Check out our video, Property prices will fall, for a full look into what you reckon will happen to house prices - and why.

However, you don't just have to rely on the housing market itself to influence your home's value.

Do it yourself!

There are all sorts of things you can do to your home which can ramp up its value, from a fresh lick of paint to an extra room or an extension.

We have a terrific make home improvements goal full of hints and tips on the various changes, big and small, which can add thousands to your home's value. Why not give them a try?

Location, location, location

Cliché maybe, but where you buy your house has a big bearing not just on its value now, but in the future too.

Research by Nationwide last year found that living near a top performing primary school can boost the value of your property by a whopping £20,000. Ensuring your property is near an up and coming school can therefore not only present a great opportunity for your kids' education, but also for your chances of making a few bob when you eventually sell up!

Your neighbours can also make a significant difference - living next to a dilapidated home for example can slash as much as 10% off the value of your home. That's some serious cash you're waving goodbye to, through no fault of your own!

Do things the Scandinavian way

I remember when my parents moved years ago, all the family pictures and things demonstrating we lived there (in other words my Playstation and posters from 'lads mags') were put away at the back of cupboards.

It didn't really work, but apparently our Nordic friends take things to an even more extreme level when selling their property, and get a small fortune back as a result. Why not have a read of Sell your home like a Norwegian and make thousands and see if it could work for you?

Compare mortgages at lovemoney.com

Get help from lovemoney.com

If you fancy getting the best deal you can for your home, then lovemoney.com can help.

First off, why not try following some of the hints and tips in our goal: Make home improvements

Next up, have a watch of this video: House prices have bottomed, says Sarah Beeny

And finally, if you need some advice on great ways to add a few bob to the value of your home, why not pick the brains of your fellow lovemoney.com users in our Q&A section?

What do you think will happen to house prices?

Tell us your views using the comments box below!

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eLJay said

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Redruth? close to the coast? About as close as Scunthorpe is.

Seeing fools put money into property in a town with millenia of deep mining holes and housing built upon this swiss cheese like rabbit warren of an earth works, well those greedy buyers may just find a very large surprise in the years to come.

People from London and the Home Counties seem to love Cornwall, I think they may someday get a rude awakening.

04 February 2010

Aquasponge said

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"The economy remaining on life support" and "House prices up 207%!". It seems that the author can't see the link between the two and has the naivety to talk about these things in positive terms.

He may as well just said "I got my stomach pumped" and "I drank two bottles of vodka". Talking up these actions maybe cool in the school playground but most would probably just think "stupid boy".

04 February 2010

islandcat said

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Redruth isn't exactly by the seaside but I must point out, elJay, that all the residents of Redruth do manage to go about their day to day business without their houses falling into a mine shaft.

Of course, any sensible buyer will have a mining survey done before buying but, although we are but simple country folk, we have mastered the art of not building our own houses over a dirty great hole.

I would like you all to spare a thought for those Cornish who now wish to buy a house in the town they were born and brought up in. Have their wages increased by 207%? I think not.

04 February 2010

Mick James said

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"Seeing fools put money into property...those greedy buyers"

Oh please will someone change the record? "Greedy" just because they bought a house? And foolish like a fox, methinks, looking at those figures.

"spare a thought for those Cornish who now wish to buy a house in the town they were born and brought up in"

I assume you mean "who don't own houses" --the rest of them will probably be tickled pink, particularly the ones who can now sell at a massive profit and move far from where they were "born and brought up". Or should we all be tied forever to the parish of our birth, like mediaeval serfs?

04 February 2010

bimber said

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On my street prices rose by about 250% and it's not what you'd call "coastal". The reasons for the increase: taxpayer-funded new school with fancy computer labs etc, taxpayer-funded crime reduction measures halving crime in the decade, taxpayer-funded regeneration of the local high street, taxpayer-guaranteed banks lending stupid amounts of money for home purchases.

And who keeps the profits from this taxpayer largesse? Just me, tax-free. If taxation were shifted onto land and away from labour our economy would be based more on production and less on speculation, which would be a good thing all round.

Why would people in Redruth be laughing when they have to pay 16 times average wages for an average house? I've seen people on this site commenting that those expecting prices to fall are hoping to profit from others' misery. Not true at all! Anyone can sell if they want to escape the potential misery, but those born too late to profit from the bubble have to suffer until sanity returns. A Cornwall MP wasn't laughing when he said that "Soaring house prices, and the knock-on effects for rented and social housing, damaged 'every aspect' of people's lives, including job prospects and schooling."

http://www.thisisdevon.co.uk/news/House-prices-Region-UK-s-highest-risers/article-1761858-detail/article.html

A house priced below the national average is not necessarily a bargain. It would be a bargain if it were priced below the long term trend for the area.

04 February 2010

bimber said

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@Mick James, "should we all be tied forever to the parish of our birth, like mediaeval serfs?"

Of course not, but it would be nice, like for people who lived way back in the nineties, not to have to move away.

04 February 2010

ITexpert77 said

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I noticed back in 1999 that house prices in Redruth were very low, and I asked an estage agent, and he said high unemployment & crime since the mines closed, so I decided I wouldn't want to live there then, my mistake! :)

04 February 2010

LandOfConfusion said

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"but I still think the fundamentals of the UK housing market - the severe lack of supply, the British obsession with home ownership, and the growing population - will result in house price growth over the next ten years."

Is the horse dead yet? Better beat it some more.

When I studied fundamental biology I was taught about limiting factors. These are the things which, even if everything else is in excess, will prevent or regulate further growth. All the points you've just mentioned have been rolled out time and time again by property bulls. But you forget to mention the most important factor, the limiting factor:

Affordability.

It doesn't matter how big the population is. It doesn't matter how obsessed people are with home or BTL ownership they are. It doesn't even matter if we have supply issues. All that matters is "Can I afford it?"

At the moment this market is being propped up by two things, the most important of which is interest rates (the other being employment levels). If IR's go up which direction do you suppose house prices will go?

"If the mortgage market recovers sufficiently for some truly competitive first-time buyer tailored products to be launched"

Another myth. First Time Buyers (FTB's) don't matter anymore. They're being replaced by investors (BTL'ers) who have far more equity than the FTB'ers have inital capital (deposits).

bimber said:

"If taxation were shifted onto land and away from labour our economy would be based more on production and less on speculation, which would be a good thing all round."

Here here!. That's one of the reasons why Land Value Tax is such a good idea. It's just a shame that we don't have any truly progressive parties in Britian.

04 February 2010

UpHillAllTheWay said

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Redruth is 4 miles from Porthtowan or Portreath on the North coast, and less than 12 miles from Falmouth on the South coast.

Nowhere in Cornwall is far from the sea.

My Dad lived his last 20 years in Porthtowan, till he died just before the turn of the Millenium. I know that while he loved Truro, he didn't like Redruth - though I don't know the reason. Maybe the unemployment and crime mentioned above had run it down a bit. It seems that something has revived it, though.

04 February 2010

nickpike said

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Bit hard to believe. I live just outside in Illogan. Redruth is an old industrial town and is run down and scruffy. It needs a lot of money spending on it. Any worthwhile jobs finished some years ago with the demise of tin mining that carried on until quite recently in this arae and the closing of Holmans that was a big employer manufacturing mining equipment. The site is now a Teso supermarket.

Unemployment around here is high, and the town had a curfew on young people as an experiment.

We're now thinking of moving out as the weather has been poor for the 4 years we've been here, the area id austere, the roda are poor and it take forever to get to other parts of the country. Nice for holadys but not what it's cracked-up to be to live here.

Watch out for minig subsidence, and a lot of properties are cheap buid. There are a lot built of Mundic block and many have deteriated and have been demolished. There was some chemical problem, ansd getting a nmortgae on a Mundic blocjk house is nigh on impossible.

If prices can jump at such a rate on the back of cheap credit, they can crash back and will do so over the next few years.

04 February 2010

krustallos said

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Yes, it may be good news if you bought a house in Redruth as an investment, but if you actually live there it's probably not so great, particularly if you're a potential first time buyer who's found themselves priced out of the market by Londoners buying holiday homes, which is what I suspect underlies this price increase (I doubt these are town centre homes we're talking about).

Anyway, over time I think we can probably expect to see the house price/average earnings ration return to between 3 and 4 where it's usually been. Otherwise, who will be able to afford to live in these houses?

04 February 2010

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