High employment adds £100,000 to house prices

5th December 2014

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Property prices in areas when employment is high have risen by £100,000 over the past decade, more than double the national average.

Average house prices in the 20 top performing employment areas have increased 45% against a national average of 21%. The average house price in the 20 local areas recording the largest increases in employment in the 10 years to June 2014 rose £103,785 against £35,456 for the whole country.

At the same time, employment in those areas has increased by an average of 26%, well above the average national rise of 4%.

Martin Ellis, housing economist at Halifax, said: ‘There is a clear relationship between employment patterns and house price performance over the past decade. Top performing areas for employment have generally seen well above average house price gains while the worst performing employment areas have typically recorded much more modest property house price rises.

‘The demonstrates the importance of economic conditions to the health of the local housing market.’

The 10 best performing house price locations have been evenly split between northern Scotland and central London. Seven of the top 10 areas also feature  among the top 25% of local areas in terms of employment growth over the period.

Aberdeen and Aberdeenshire have benefited from strong performance in the oil sector, Tower Hamlets, Hackney and Lambeth been boosted by wider house price growth, as have Southwark and Lewisham.

The top 10 performing house price locations have significantly outperformed the rest of the country with average house price gains of 89% – more than four times the national average – while employment in these areas have grown 15%.

At the other end of the scale, the areas experiencing the worst employment performance over the past 10 years have underperformed house price gains, recording increases in property value of less than £20,000.

The bottom 10 are concentrated in the north of England, the Midlands and Northern Ireland, where employment has fallen by an average of 3%.

 

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