Scotland, London and the South East are set to see a boom in property prices this year while northern England and the Midlands are forecast for a 'modest decline,' according to Halifax's 2008 property forecast.
Over the past ten years, house prices have seen a 179 per cent increase, rising by an average of £70,000 in late 1997 to £195,000 today. Now Halifax has discovered that 13 of the top 20 towns with the biggest price rises across the UK are in Scotland and the South East.
Scotland's success is being attributed to the availability of affordable homes which have provided the springboard needed for further significant house price growth, while employment figures have risen by 125,000 in the last five years and immigration inflows in 2006 swelled the population by a further 22,000. It is the same story in the South East where unemployment is very low and the region boasts the five of the six lowest unemployment local areas in the UK.
Montrose in Scotland takes the top spot for the town with the most likely house price increase after it reported an average price of £123,494 in 2006 rising to £172,156 in 2007 – a 39 per cent change. This is followed by Winchester in the South East where a home cost an average of £290,649 in 2006, shooting up by 38 per cent to £399,765 in 2007. Other towns set for a boom include Billericay in the South East, Peterhead in Scotland and Stourbridge in the West Midlands which, in the past year alone, have reported a 35 per cent, 33 per cent and 31 per cent increase respectively.
However, it is not all good news after Halifax predicted that worsening affordability and weakening economies will cause a modest fall in prices in northern England and the Midlands.
Unsurprisingly, parts of East London, such as Hackney, are likely to be one of the top house price performers in 2008 as regeneration ahead of the 2012 Olympics attracts buyers. Other areas of London also set for a boost are homes in the areas close to the planned Crossrail line in London.
The Halifax report has also found that nearly half of all British towns now have an average house price above £200,000 compared to five years ago when 21 per cent had an average house price above £200,000 while the average house price is over £100,000 for the first time in all towns surveyed.
Colin Kemp, Managing Director at Halifax Estate Agents, comments: "Some areas will continue to be in high demand next year with property prices rising accordingly despite the expected subdued outlook across the market as a whole.
Those areas that are likely to record the biggest price gains will tend to be those with a combination of good transport links to a major conurbation and relatively low average prices. A number of areas will see a boost to prices as a result of significant infrastructure projects."
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