House prices in the UK suburbs have grown at record rates, according to new research, with city dwellers helping to drive the spike as they hunt for more space.
An analysis of mortgage transactions included in the Halifax House Price Index between March 2020 and June 2021 revealed that house prices in major British cities (excluding London) grew by an average of 8.9 per cent.
However, in the areas surrounding those cities, average house price growth was much higher at 10.8 per cent, turning the traditional trends on their head.
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Drilling into details, researchers found that the picture varied significantly in individual cities across the country.
In Plymouth, on England’s South West coast, the city itself saw house price growth of 5.8 per cent between March 2020 and June 2021, while in the surrounding areas, the average was 16.1 per cent.
This was driven by the likes of South Hams – home to Salcombe, Britain’s most expensive seaside town – which at 26.3 per cent has seen exceptional house price increases during the pandemic.
Meanwhile in Leicester, house prices in the city grew by 6.5 per cent over the same period, compared to a rise of 12.1 per cent on average in the surrounding area, with Rutland and Melton up by 22.5 per cent.
However, further north it was a different story. In Newcastle, property price increases in the city itself (+6.5 per cent) continued to outstrip those in the surrounding areas (+4 per cent).
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North Tyneside was one of the few areas surrounding major British cities to record a fall in average house prices during the pandemic (-5.0 per cent).
Commenting on the findings Andrew Asaam, mortgages director at Halifax, said: ‘The pandemic has had a huge impact on the housing market right across the country.
‘This has been shaped by buyers’ demand for more space, a desire to move from the centre to more suburban locations, and the trend for more home working both now and in the future.
‘It’s clear from speaking to our mortgage customers that many have prioritised space over location as a result of more time spent at home over the last year and a half.
‘As consumers look for value in the market, that inevitably leads people to look further afield from major city centres, where you tend to get more property for your money.’
Analysts said another contributor to the trend was the stamp duty holiday, as people looked to buy larger, family-sized homes with the tax threshold raised to £500,000.
Overall, the Office for National Statistics recently revealed that the average house price across the UK had increased by 13.2 per cent between June 2020 and June 2021, from £234,668 to £265,668.
By SADIE WHITELOCKS
Source: This is Money
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