Property hotspots of 2009!

Nationwide reveals house prices rose 3.4% last year, but were the property hotspots near you?

2009 was never going to be a great year for the property market, but the latest figures from Nationwide reveal better than expected news. Most UK regions saw property prices rise with the average up 3.4%* on the year. The average home is now worth £162,116.

In fact, prices across the UK rose by 1.6% in the final quarter of the year, boosting the annual rate of change from -3% in the third quarter to +3.4% as the year drew to a close.

That's a fantastic sign for homeowners everywhere...isn't it?

Unfortunately, there's one pretty big problem with national averages - it totally masks regional variations. UK house prices may indeed have risen 3.4% in 2009 on average, but does that mean prices have also stepped up where you live?

Luckily, the good people at Nationwide have also revealed how the property market has fared in each region of the UK. This makes a massive difference since prices in the best performing region rose 7% in 2009, but fell 6.7% in the worst performing region. 

Let's take a look at the top five property hot spots - and worst cold spots - of 2009:

Top five property hotspots by region in 2009

Bottom five property cold spots by region in 2009

As the table shows property prices grew a healthy 7% in London making it the top performing region of the year with an average price of £276,088. Having said that, not all London boroughs experienced such strong growth. The borough of Barking and Dagenham fell 12% with average prices almost 40% below the London average at £175,296. On the other hand, homeowners in Tower Hamlets will be pleased to know prices rose a whopping 14% over the year.

Past data has always revealed a distinct divide between the north and south of the country, with higher house prices and faster house price growth the further south you go. Certainly, the figures for 2009 continue to bear this trend out.

Once again, the southern regions have far outdone those in the north. The North region - which includes County Durham, Cumbria, Northumberland, Teeside and Tyne and Wear - was the only English region which failed to produce positive growth in 2009 with an annual price change of -2%.

But the poorest performing region in the whole of the UK was Northern Ireland with an annual change of -6.7%. As if that wasn't bad enough, Northern Ireland was the only region where prices didn't rise in the final quarter of the year.

And it's more bad news for homeowners in the sub-region of Northern Ireland (West) where prices fell 14% on the year. In this area higher levels of unemployment have undoubtedly impacted negatively on the local property market.

Top towns and cities

But this data still hasn't gone far enough. Let's break it down even further and check out where the hotspots and cold spots are for the housing market in specific UK towns and cities:

Top five property hotspots by town/city in 2009

Bottom five property cold spots by town/city in 2009

Once again there's a huge difference between best and worst performing places. In 2009, the Cumbrian town of Carlisle experienced the strongest house price growth with a rare double-digit increase of 10%. This lifted the average house price in the town to £136,666.

This is particularly interesting because the north region as a whole was the worst performer of all the English regions, yet it is home to the top performing town in the UK. Explain that, if you will!

Meanwhile Leicester, in the East Midlands region, was the worst performing city. Average house prices fell miserable 9% in 2009, dragging the average price down to £141,643.  

In summary....

Overall, the tide does appear to be turning at last with a general rise in house prices across the UK last year - at least, according to the Nationwide index. But the property market has clearly experienced mixed fortunes when it comes to specific towns and regions. This makes it exceptionally difficult to draw any concrete conclusions on where prices will head in 2010, but watch out for a second article later this week where I'll summarise some of the major house price predictions for the New Year.

In the meantime, if you're wondering whether now is a good time to buy or sell, why not ask other lovemoney.com homeowners for their opinions using our Q&A tool. And if you've already made the decision to move, make sure you adopt our Sell your home goal for all our tips on how to get the best price for your property.

*The annual change is calculated based on quarterly average figures.

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