Last week, amid the turmoil of coronavirus, the ONS released its house price index which – for the first time  – provided us with 25 years of house price data at a local authority level across England and Wales.

At the extreme it showed that between January 1995, when the data was first collated, and January 2020 house prices in Hackney rose by a thumping 833 per cent. At the other end of the scale, prices in Hartlepool rose by just 153 per cent. This means that over the course of a quarter of a century, what was a £19,483 gap in the average house price between these two local authorities has grown to £465,779, a 24-fold increase.

This statistic alone illustrates the highly localised nature of the UK housing market and its widely differing fortunes.  

Some of that is down to economic and demographic drivers at a regional level. So in London, where wealth generation has increased dramatically and there has been a large imbalance between the demand and supply of housing, average prices have risen by £402,152 in the past 25 years. That is 4.8 times the £84,515 increase seen in the North East, where the regional economy has faced deeper challenges and supply and demand have been much less at odds.

But it is also down to local market dynamics. That is why price growth in Hackney – which has been the epicentre of the rise of east London over a full quarter of a century – is some way ahead of its nearest rival.

It is also why Brighton has seen the fifth highest house price growth (664 per cent) of any local authority, and why Bristol – believe it or not –  has shown higher house price growth than Richmond upon Thames. 

Both Brighton and Bristol have become increasingly fashionable over the past 25 years, with the emergence of diverse and vibrant local economies that have been generators of wealth in their own right. As such, they’ve become magnets for affluent households looking to relocate from London, often in search of more space and a change in lifestyle.

Perhaps more surprising is the appearance of Southend-on-Sea and Hastings on the list of areas with the highest house price growth.

Prices came off a low base in these two traditional seaside towns after the downturn of the early 1990s, meaning – despite 25-year price growth of 543 per cent and 513 per cent respectively – they remain relatively affordable in a regional context.

In these locations, the reinvention and regeneration that has been fundamental to the rise of Hackney, Brighton and Bristol alike, will be critically important to their continued success over the next 25 years; one which should not be measured in house prices alone.

For home owners lucky enough to ride this wave of house price growth there have been significant gains, on paper at least, but it has come at the cost of affordability, particularly in the high value markets that have seen the greatest house price growth.

Further information

Contact Savills Research