In the decade since the financial crisis, auction prices for residential lots have undergone many troughs and peaks. But while in a few areas prices have surpassed 2007 prices, in most parts of the country they are yet to fully recover.
It is a story of a country split in two, according to data from the Essential Information Group (EIG). Prices in the Midlands and in the south of England have largely recovered, whereas prices in northern England, Scotland and Wales have continued to fall.
“The data clearly shows that, as one might expect, London bounced back the quickest after the crash of 2007-08 and was followed by the home counties,” says David Sandeman, managing director at the EIG, adding that the results are based on a sample of more than 11,000 transactions each year.
Indeed, London and the home counties are the only areas of the country where prices for residential lots have surpassed pre-recessionary levels. Prices began to regain ground in 2009 and passed the previous peak between 2012 and 2014.
While London recorded the highest figures, achieving a bumper £355,000 in 2016, the north-west home counties saw the most rapid increase, recording an increase of £100,000 in just three years, from £179,000 in 2013 to £279,000 last year. The south-east home counties also performed strongly. There, prices rose from 2012 to reach an average of £200,000 in 2016.
In East Anglia prices fell just £5,000 short of the price it recorded before the recession last year, with an average price of £132,000. Some cities within the region, however, performed better than others.
“Cambridge is probably 50% or 60% above 2007 levels,” says Ian Kitson, director at local auction house Cheffins, adding that counties such as Norfolk recently recorded figures up to 20% higher than in 2007.
Albeit less dramatically, sales prices in both the East Midlands and the West Midlands have increased steadily after the sharp fall seen between 2007 and 2009, with prices now closing in on the £100,000 mark recorded in the mid-2000s.
Conversely, the biggest crash was recorded in Scotland. In 2008, average prices reached £79,000 and then fell dramatically in the following years, hitting a trough of £42,000 in 2016 – the worst result of the 12 regions. Prices in the North East and the North West have also failed to recover, with sales prices in 2016 40% and 30% below peak respectively.