House prices have soared by almost £100,000 in areas that have seen the steepest declines in unemployment over the past decade.
Price gains have been almost double the national average over the past ten years in the 20 parts of the country with the most dramatic drops in unemployment - 48 per cent against the Great Britain average of 25 per cent, according to new analysis by Lloyds Bank.
And the rise was even sharper - 53 per cent - in the 10 areas with the biggest unemployment declines.
The best performer was the London borough of Waltham Forest, which has experienced a 92 per cent house price rise over the past decade from £233,779 to £449,384.
Eight of the top 20 highest-performing areas were London boroughs, while areas such as Great Yarmouth (31 per cent), Coventry (28 per cent) and Leicester (22 per cent) also saw big gains alongside robust jobs growth.
The areas that have performed worst in unemployment terms over the past decade - either recording very small falls or a rise - have seen a 26 per cent price rise, in line with the national average of 25 per cent.
Lloyds Bank mortgage director Andrew Mason said: "A number of factors have contributed to mounting pressures on house prices across the country in recent years, however, falling unemployment and the creation of more jobs are key drivers as this research highlights.
“A strengthening job market helps to boost confidence, puts more cash into customers’ pockets and also makes it easier to secure a mortgage. These developments all help to increase the demand for homes, which leads to increasing property prices.”
John Phillips, group operations director at Colchester-based Just Mortgages and Spicerhaart commented: “Despite the broadly favourable economic backdrop with low unemployment, a number of factors are continuing to contribute to the rise in property prices across the country, including issues surrounding affordability.
“However, although employment levels are having an impact, the most pressing issue has been the increase in demand for homes which is outstripping supply. In fact, I recently read that in order to meet this growing demand, the UK construction industry would need to hire more than 400,000 workers annually for the next five years.
“Due to the increase in house prices, an increasing number of people are migrating and moving to different parts of the country. Ultimately this is what is pushing up prices, and the south east is a classic example of this.
“Of course, supporting economic growth in order to keep the housing market ticking over is important. However, the structural demand-supply mismatch is clearly the housing market’s biggest concern and an issue that the whole property sector is suffering from.”
simon.allin@ft.com
