A yawning house price gap has opened between areas with high unemployment and places where jobs are plentiful, widening the north-south divide, a study has found.
People in areas of low unemployment have seen the prices of their homes rise by an average £90,000 since 2006, almost five times more than those living in areas of high unemployment, according to Lloyds Bank.
In the ten areas with the highest unemployment rates, house prices have risen by only 18 per cent, or £24,587. Seven of those ten areas are in the northwest of England.
Much of the gulf in performance reflects the much quicker recovery in house values in the south compared with northern England and Scotland, where values plunged by more than 50 per cent during the property crash.
Andrew Mason, mortgages director at Lloyds Bank, said that high levels of employment in an area had an evident effect on a local housing market. “Employment boosts consumer confidence, helps to put more cash into customers’ pockets and makes it easier to secure a mortgage, all of which drives increased housing activity,” he said.
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In the ten areas that have recorded the largest falls in unemployment since 2006, average house prices have grown by £200,155, or 76 per cent, to £464,373. Nine of these local authorities are in London, with the average value of homes in Haringey, Hackney, Southwark and Waltham Forest almost doubling over the past decade.
In Hart in Hampshire, which has had one of the lowest unemployment rates throughout the decade, house prices have jumped by 44 per cent, a £125,400 rise to £410,642. The claimant count is only 0.4 per cent in Hart, compared with a UK average of 1.8 per cent.
Similarly, West Oxfordshire, which has had an average unemployment rate of only 1 per cent over the past decade, homeowners have enjoyed a 35 per cent rise in house prices to £318,748.
In contrast, the average house price for those living in areas of high unemployment areas is £139,520, which is £102,655, or 42 per cent, below the national average price of £242,175.
In Blackpool, where there has been an average unemployment rate of 5.2 per cent over the decade, house prices have gone up by only 3 per cent from £117,893 to £121,672. Similarly, in Liverpool, house prices have increased by £22,801 to £155,115.
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Mr Mason said those living in areas of high unemployment were struggling to sell their homes in the hope of moving to a bigger property, as selling their property would not generate enough equity to finance trading up.
The average home in the UK is now worth £242,175, up from £180,599 ten years ago, a rise of 34 per cent, Lloyds’ research shows. Excluding London, the average price of a home is £214,776, having grown by 29 per cent.
