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House price boost in high employment areas

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18/05/2015
Areas of the country with high employment levels have seen house prices rise by almost £65,000 since 2009, a report has found.

Lloyds Bank’s analysis of the market found the local authorities with high employment had seen price growth of 23% in the last six years. This is equivalent to a £64,783 rise and is higher than the Great Britain average of 17%.

The bank said there was a correlation between employment levels and house price growth.

Those areas with high unemployment saw a price rise increase of £4,000 in the same period. This was a total increase of £4,100.

While London has seen the highest levels of price gains since the market crash, none of the top 20 areas for unemployment were located in the capital.

Discounting London from the figures, property prices increased by 11% across the rest of Great Britain.

Hart and Winchester, which have had the lowest average unemployment rates since 2009, recorded house price gains of 33% and 37% respectively during the last six years.

By contrast, Hull and Middlesbrough – the two areas with the highest unemployment – saw house prices increase by only 2% and 1% respectively in the same period.

Andy Hulme, Lloyds Bank mortgages director, said areas with low employment had struggled as the wider market had recovered.

“There has been a very clear relationship between conditions in the local jobs market and house price performance during the period since the housing market downturn between 2007 and 2009,” he said.

“Those areas with low unemployment and high levels of employment have tended to record above average house price growth. Areas with high unemployment and relatively low employment have, on the other hand, typically underperformed.

“The past few years have underlined the importance of local economic health in determining house price behaviour. Other factors, however, are also key drivers of house price trends including the strength, or otherwise, of housing supply.”

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