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Economy in Brief

UK House Prices Up 11% in March; Increase Is Especially Large in Northern Ireland
by Carol Stone April 5, 2007

House prices are strong in the UK. Today's Halifax [HBOS] data show an 11.2% advance for March over a year ago, with a 1.1% rise in March alone. Both new and existing homes are experiencing the same general pattern, with new houses more erratic than existing, as seen in the graph.

Compared with the overall US market, the behavior of new and existing homes varies. Clearly, current market conditions in the US are weaker and prices of both kinds of houses are flat to declining. Further, in the US new home prices run consistently higher than those on existing homes. But in the UK, the opposite can hold, and for considerable time. From the middle of 2004 through this past December new home prices were lower, generally by 3 to 5%, than existing home prices. UK homes appear to gain value in both an absolute sense and relative to new construction.

We're also fascinated by the array of regional information in the Halifax data. Prices are highest by far in London, as one might expect. Also, values are higher in the southern part of the country, in both South East and South West, than the national average. The South East includes Cambridge, Canterbury and Dover, among other well-known areas. The industrial north sees lower price levels, including North West, where Manchester is the biggest city, and Yorkshire.

The improvement in the political situation in Northern Ireland has done wonders for its housing market. As seen in the table below and in the graph, prices there are now above the UK average, at over £200,000 during Q1. This latest is an increase over a year ago of 37%, and actually a "moderation" from the 53% gain during Q4 2006. Even over the past years of political tension, house prices in Northern Ireland managed to rise in fits and spurts, but obviously much more gradually than these recent substantial increases.

These data are in Haver's UK database and represent prices of standardized houses. The US data we compared are in USECON and are the median of actual selling prices for whatever combination of homes was sold in the specific time periods.

Feb 2007
Halifax House Prices: SA, £ Mar 2007 Jan 2007 Year Ago 2006 2005 2004
United Kingdom 194,362 192,349 188,826 174,814 179,175 165,310 156,980
  Yr/Yr % Change 11.2 11.0 10.4 7.4 8.3 5.3 18.8
  Q1 2007 Q4 2006 -- -- -- --
Greater London 297,132 287,737 258,605 270,458 246,149 242,072
South East 248,268 241,356 221,925 231,462 217,364 214,752
North West 151,341 149,914 141,445 144,658 133,502 121,758
Yorkshire & the Humber 145,419 144,564 134,709 139,213 126,578 114,960
Northern Ireland 206,495 197,086 150,808 168,696 124,803 102,570
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