Research from the Halifax, the UK's largest mortgage lender, covering 720 towns across the UK shows that the average house price has risen by 75% during the last 10 years.

Over this period the biggest house price increases have occurred in Thames Ditton, Surrey (206%) and Teddington, Greater London (194%), whilst the weakest performances over the same period have been seen in Irvine (-5%) and Ardrossan (-6%) in Scotland.

The research also highlights the most expensive and the least expensive areas to live in the country, Gerrards Cross, Buckinghamshire is the most expensive town and Aberdare in South Wales and Wallsend, Tyne & Wear are the least expensive towns.

The main findings of the research are as follows:

There has been a wide variation in the performance of house prices across the country. At the regional level, house prices have risen most rapidly in Northern Ireland (139%) over the last decade. At the other extreme, house prices have risen most slowly in Scotland with a 33% increase over the 10 years.

There has been a marked north/south divide in house price movements on the British mainland since 1991. House prices have risen by significantly more in the four regions that comprise southern England - Greater London, the South East, the South West and East Anglia - than in northern England, Scotland and Wales.

The top 20 is dominated by towns in Greater London and the South East, which account for 13 of the 20. A further five are in Northern Ireland, reflecting the remarkable rise in prices there over the past 10 years. The remaining two towns are Marlborough and Shepton Mallet in the South West.

Towns in northern England and Scotland, accounting for 10 and 9 towns respectively, dominate the bottom 20. The remaining weakest performer is Ammanford in South Wales.

The full listing of the 720 towns further underlines the north/south divide in the housing market over the past 10 years. Towns outside southern England and Northern Ireland are sparsely represented amongst the top half of the table, accounting for only 43 of the 360 towns recording the biggest prices rises in the past 10 years.

Lymm, Cheshire is the town in northern England experiencing the biggest rise in prices since 1991 and, at 60th, is the only northern town in the UK top 100. Moreover, the four top performing northern English towns are all in Cheshire. St Andrews and Galashiels are the only Scottish representatives in the top 300. Whilst only Cardiff and neighbouring Penarth represent Wales in the top 300. Otley, West Yorkshire and Berwick upon Tweed are the only towns in northern England outside Cheshire to appear in the top 300.

Likewise there is little southern representation in the bottom half of the table, which is overwhelmingly dominated by towns in northern England, Scotland and Wales. Newcastle under Lyme, Tipton in the West Midlands and Matlock, Derbyshire are the only towns outside these parts of the UK to appear in the bottom 100.

Polegate, East Sussex is the worst performer in the South East, ranked at 481st. Despite its relatively low ranking, prices in the town have increased by a still healthy 50% over the past 10 years.

Gerrards Cross, Buckinghamshire is the most expensive town in the UK with an average house price of nearly £378,000 followed by Esher, Surrey with an average price of £376,000. These two towns were also the most expensive, albeit in the opposite order, 10 years ago. Indeed, four of the current five most expensive towns were in the top five 10 years ago. Thames Ditton is the new entry, having risen from 32nd. Ascot has dropped out of the top five to 18th.

The 82 most expensive towns in the UK are all in Greater London and the South East. The most expensive town outside this part of the country is Lymm, Cheshire with an average price of nearly £205,000.

Aberdare in South Wales and Wallsend, Tyne & Wear are the least expensive towns in the country in which to buy a property. The average price in both towns is nearly £43,000. Accordingly, one can buy nearly nine properties in Aberdare and Wallsend for the price of one property in the UK's most expensive town, Gerrards Cross.

Martin Ellis, Halifax Group Economist, commented: "Although there has been a huge variation in house price growth across the country, there is little doubt that homeowners have done very well over the past 10 years. The scale of the increase in house prices in many of the country's towns over the last 10 years demonstrates that residential property is a very good long-term investment. In the overwhelming majority of towns in the UK, house prices have risen by more than the 30% increase in retail prices over the period."

Table of top 20 post-towns by % increase

Table of top 20 post-towns by % increase

Table of bottom 20 post-towns by % increase/decrease

Table of top 10 post-towns by 2001 average price

Table of bottom 10 post-towns by 2001 average price

HOUSING MARKET BACKGROUND - THE LAST 10 YEARS

The UK economy in 1992

Ten years ago the UK economy was in the grips of a recession. Unemployment was increasing sharply, rising to 2.9 million at the end of 1992. Mortgage rates had fallen from their peak of 15.4% in 1990 but, at 10.95% in February 1992, were still almost double their current level.

The UK housing market in 1992

The UK housing market was also in a slump. Nationally, prices fell by 8% in 1992 and transactions totalled only 1.1 million, marking the lowest level of turnover in the market since 1974, and a far cry from the record of 2.1 million in 1988. The number of properties taken into possession had soared from 16,000 in 1989 to 69,000 in 1991 and the number of households with negative equity was climbing significantly, reaching a peak of almost 2 million towards the end of 1992.

The housing market over the past 10 years

House prices stabilised in 1993 but subsequently fell again in 1994 and 1995. Thereafter, the market began a genuine recovery with a 7% increase in prices in 1996. The market has been particularly buoyant over the last three years, driven by a combination of strong economic growth, low and falling unemployment and low interest rates.

Housing affordability

The average house price in the UK currently stands at a multiple of 4.0 times average earnings in the country. This is above the average of 3.6 recorded since 1983 when the Halifax House Price Index began, but is comfortably below the 5.0 peak in mid 1989. The cut in interest rates over the past year has reduced mortgage payments as a proportion of gross earnings for the average purchaser in the UK from 22% to 15% in the last 12 months. Consequently, mortgage payments account for a smaller share of income than at anytime since 1983.

Prospects for 2002

This largely favourable affordability situation will continue to support housing demand during 2002. The manufacturing sector's ongoing recession, and the prospects of rising unemployment and higher interest rates later in the year, are, however, likely to constrain the market. Overall, house prices in the UK are predicted to increase by around 5% this year.

For further information and local breakdowns, please visit the Halifax website:
http://www.hbosplc.com/media/pressreleases/archive.asp?section=halifax