Irvine top property hotspot

Average prices in Irvine are up from £69,536 in 2004 Quarter 2 to £100,249 in 2005 Quarter 2.

Scottish and Welsh towns dominate the UK top 10 with five and two towns respectively in the list. Additionally, all 10 towns recording the biggest price increases in the last 12 months are outside southern England. Port-Talbot (43%), Motherwell (41%), Glenrothes (39%) and Blackwood in Gwent (38%), along with Irvine, make up the top five.

There have been significant changes to the top ten in recent quarters with only one town, Port Talbot, in the list six months ago. All 10 towns delivering the strongest price rises over the past year had, and continue to have, average house prices below the UK average.

At a county level, County Fermanagh in Northern Ireland (31%) has seen the biggest price rises over the last year followed by Highlands in Scotland (27%) and Dumfries & Galloway in Scotland (22%). Counties in Scotland dominate the list of counties across the UK that have recorded the fastest price rises for the year. There are six counties in amongst the 10 counties UK-wide recording the biggest price gains in the last 12 months.

A number of counties in the South East have recorded small house price falls over the past year: Oxfordshire (-2%), Buckinghamshire (-1%), Hertfordshire (-1%) and Surrey (-1%). Nine of the ten counties recording the smallest increases over the last 12 months were in southern England.

There has also been a distinct north/south divide in house price performance over the past year with more subdued or falling prices across southern England. Northern Ireland (26.9%) and Scotland (12.5%) have experienced the strongest price rises, followed by Yorkshire and the Humber (8.9%), Wales (8.7%) and two northern English regions –, the North West (7.8%) and the North (4.9%). As previously forecast, Greater London (-2.5%), the South East (-0.6%) and the South West (1.6%) have seen the most modest performance.

However,in the last ten years house prices have risen in London by 207% , 180% in the South East and 202% in the South West since 1995 Quarter 2.

The gap between prices in London and the rest of the country has declined to its lowest level in more than seven years. The average price in the capital stood at 1.47 times the national average in 2005 Quarter 2 compared with a peak of 1.87 times four years' ago (2001 Quarter 3). It is now at its lowest point since 1997 Q4. The north/south divide, however, remains wider than it was ten years' ago when the average price in London was only 1.26 times the national average. (See Table 2)

In the second quarter annual house price growth across the UK fell below annual average earnings growth for the first time since early 2001. The 3.7% rise in UK house prices compares with a 4.6% increase in earnings over the past year. Earnings are expected to continue to outpace house prices during the second half of 2005 which should see the house price:earnings ratio to decline from its current level of 5.5. This would help somewhat to ease the affordability difficulties faced by first-time buyers.

Commenting upon the housing market in the UK, Martin Ellis, chief economist, said: "Areas outside southern England, particularly in Scotland and Wales, have experienced the most buoyant housing market conditions over the past year. It has been those areas where prices have, on average, been lowest that have delivered the biggest gains in prices as property has remained more affordable in these places.

"The economic fundamentals underpinning the housing market are sound. Earnings growth is robust. The UK economy continues to grow with the number in employment at a record high, and mortgage payments are very close to their long-term historical average as a proportion of income for new borrowers.

Although the slowdown in house price inflation over the past year has been broadly based, there continues to be a distinct north/south divide with more subdued, or falling prices, across southern England. As a result, the gap between prices in London and the rest of the UK has fallen to its lowest for 8 years."