House prices in cities have risen by more than the UK as a whole over the past decade. Prices in cities increased by an average of 38% from £125,276 in 2002 to £173,322 in 2012. This exceeded the 29% rise for the UK as a whole.
Nitesh Patel, housing economist at Bank of Scotland, said: "Cities have typically recorded higher house price growth than the UK average over the past ten years. The majority of cities have also outperformed their region. The Scottish cities of Aberdeen (94%) and Inverness (81%) recorded the biggest price rises between 2002 and 2012. Two other Scottish cities – Dundee (73%) and Perth (70%) – also feature in the top five."
The Northern Irish cities of Lisburn (2%) and Belfast (3%) have seen the smallest price rises over the last ten years, largely reflecting the substantial decline in house prices across Northern Ireland since 2007. Ely (14%) and Southampton (16%) have recorded the smallest increases in England, while Stirling (35%) and Glasgow (45%) experienced the lowest house price growth among cities in Scotland.
The majority of cities have outperformed their region in terms of house price growth since 2002. Two-thirds (67%) – 41 of the 61 cities surveyed – recorded average house price increases above their region’s average over the period.
The picture in Scotland is similar with four of the seven cities – Aberdeen, Inverness, Dundee and Perth – all outperforming the Scottish average. Edinburgh, Glasgow and Stirling, however, have seen average prices rise more slowly than for Scotland as a whole.
Cities have done well in relative terms in the five years since the housing market peaked in 2007. House prices in cities have fallen by an average of 17% since 2007 compared with the UK average decline of 23%. Between 2007 and 2012, 70% of cities recorded a better house price performance than their region. Four of the seven cities outperformed the 21% fall in house prices seen in Scotland – Perth (-10%), Aberdeen (-11%), Inverness (-12%) and Edinburgh (-15%).
Towns that have become cities since 2000 have, on average, outperformed the country as a whole during the past decade. Eleven towns have become cities since 2000, including Inverness, Stirling and Perth. On average, these new cities have seen house prices increase by 39% since 2002. This is closely in line with the average rise for all those places that have been cities throughout the last decade (38%), but is above the 29% increase for the UK as a whole. Six of the nine new cities analysed have outperformed their regions over the decade: Newport, Stirling and Lisburn are the exceptions.
All three towns that became cities in 2000 – Brighton & Hove, Inverness and Wolverhampton – have recorded stronger house price growth than their region over the past decade. This compares with two – Brighton & Hove and Wolverhampton – in the preceding ten years (1992-2002).
The experience of those towns that became cities in 2002 to coincide with the Queen’s Golden Jubilee has been mixed. Preston recorded stronger price growth than its region between 2002 and 2012 whilst Newport, Stirling and Lisburn underperformed relative to their region. During the decade prior to 2002, Stirling and Lisburn outperformed their region while the others underperformed.
Chelmsford and Perth have both outperformed their regions in terms of house price performance over both the past decade and during 1992-2002.
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