Cities with High Employment Increase House Prices

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According to a new study, employment in the United Kingdom has more than doubled within the past 10 years.

The country’s job market has increased by 45 percent compared to 21 percent a decade ago.

Yet, researchers have discovered an interesting correlation: as employment increases in the top 20 towns and cities of the UK, so have house prices.

Since early 2000 up until 2014, employment has increased by 26 percent. In the same instance, the average house price has risen from £35,456 to £103,785 or 45 percent.

Half of the areas listed as the top 20 places—which are mainly located in London and northern Scotland-- saw the most change in housing prices. Seven of them were among the top 25 percent with the largest job growth ever seen in 10 years.  

Coincidently, these same areas have outnumbered the national housing price average of 21 percent. The prices of the housing market in the top 10 areas increased to nearly 90 percent, beating out the national average by 68 percent.   

The study revealed that housing prices in towns such as Aberdeen and Lambeth increased due to growth in the oil sector or just for the simple fact that the housing market prices in central London expanded dramatically.

As far as employment growth in these flourishing towns, they gained an average of 15 percent while surpassing the national average by nearly 5 percent

Clearly, the rise in employment has an influence on the housing market. 

However, 20 other areas in the UK are experiencing the complete opposite, including the Midlands and northern England.

Exactly six towns in the Midlands and eight in northern England are below the employment national average, which increased by 4 percent.

The employment rate in these areas dropped to 11 percent. 

Within the past decade, the average cost for homes in these selected areas has continued to rise in numbers.

Cities with the weakest employment performance had a 13 percent (£19,698) increase in average housing prices.

Since 2004, “these areas have recorded an increase in property values of less than £20,000.”

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Not only are northern England and the Midlands experiencing some of the worst housing prices and employment performance, but Northern Ireland is as well.

Ten locations in these areas have witnessed employment numbers drop by 3 percent. This figure sits below the national average, which is currently a 4 percent increase.

As a result, the housing market in these specific regions make up the most floundered areas in the UK. 

The national average house price rose by 21 percent whereas these 10 areas witnessed a 4 percent drop.

Overall, the numbers don’t lie and employment growth apparently has a positive impact on the performance of the real estate industry.  

“Top performing areas for employment have generally seen well above average house price gains while the worst performing employment areas have typically recorded much more modest property house price rises,” said housing expert Martin Ellis. “This demonstrates the importance of economic conditions to the health of the local housing market."