The Credit Crunch Effects: House Prices recover by 50%
We have reached an important point in a market seeking direction and despite the most recent 16 months of gains, only half of the value lost in the prior 16 months has been recouped.
This juncture may well determine the direction of house prices for the months to come. Our data show us that we have come through two periods of equal length and opposing directions. UK house prices have risen steadily for the past 16 months, bouncing off their lows of March 2009 and recovering half of the value lost during the prior 16 month period of price declines from the November 2007 market peak.
It is entirely possible that we may now have a similar length period of time where the market hovers without a clear direction.
The average UK home is now worth £218,705, up £21,667 (11.02%) since March 2009. However this figure remains more than £20,000 below the November 2007 peak, when average house prices reached £239,063, showing that, despite the rebound over the last 16 months, only half the ground lost over the prior 16-month period has been made up.
England – prices have recovered more ground than elsewhere, having climbed 11.46% since March 2009, with the average home in England now worth £226,342, but still well below the level reached in November 2007 of £246,714.
Wales – prices have been much slower to rebound, up only 7.07% since March 2009 to a current average value of £154,521, a long way short of the £173,388 peak in November 2007.
Scotland – property values have climbed 9.12% on average to £156,217 over the past 16 months, having fallen 18.1% in the prior 16-month period when they reached a high of £174,805.
Whilst the dramatic fall in house prices during the 16 months from the November 2007 high to the March 2009 low affected all areas of the country, the rebound in the 16 months since has been far more selective.
South East – property prices have bounced back strongly and have regained most of the value lost during the downturn. House prices in the South East, which peaked at £291,120 in November 2007 had fallen sharply by 18.24% to £238,017 by March 2009, and have since risen by 17.57% to £279,848.
North East – in contrast the North East saw average house prices drop 16.11% from £182,390 in November 2007 to £153,002 in March 2009, and have since only managed to regain 4.98%, standing today at £160,627.
London – the market has seen the most dramatic turnaround, with average house prices today at new highs and above the levels seen in November 2007. Having fallen by 16.06% from a high of £410,577 in November 2007 to a low of £344,635 in March 2009, London house prices have made up all the ground lost in the downturn and now stand at £418,802. London house prices have risen by a remarkable 21.52% over the past 16 months.
Looking at property type…
The rebound in house prices since March 2009 has been strongest for semi-detached properties, which have risen by 12.83% over the past 16 months. The average semi is now worth £191,019. At the other end of the scale, flats across the UK have been much slower to rebound and have only gained 7.78% in value over the past 16 months, having fallen by 17.34% in the prior 16-month period. The average flat in Britain is now worth £199,573, down from a peak of £224,021 in Nov 2007.
Average house prices by Country
|Country||Jul 2010||Mar 2009||Last 16 months||Nov 2007||Prior 16 months|
Average house prices by Region
|Region||Jul 2010||Mar 2009||Last 16 months||Nov 2007||Prior 16 months|
|Yorks & Humber||£145,783||£134,758||+8.18%||£164,654||-18.16%|
Average house prices by Property Type
|Property type||Jul 2010||Mar 2009||Last 16 months||Nov 2007||Prior 16 months|