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POOREST AREAS 'HIT HARDEST' BY HOUSING MARKET SLUMP

POOREST AREAS 'HIT HARDEST' BY HOUSING MARKET SLUMP (News (General))

by administrator @, Thursday, November 03, 2011, 17:42

The UK housing market is at its most subdued in the poorest areas of the country, new research from Nationwide has revealed.

Despite an overall rise in house prices of 0.4 per cent during October, and an increase in the number of property transactions, sales in what the building society describes as 'Hard Pressed' areas have fallen by two percentage points since 2008.

According to the Nationwide report, the average house price now stands at £165,650, which reflects a 0.8 per cent increase on prices a year ago.

Nationwide's chief economist, Robert Gardner, said the housing market is still "treading water".

He said: "The outlook remains uncertain, but with the UK economic recovery expected to remain sluggish, house price growth is likely to remain soft in the period ahead, with prices moving sideways or drifting modestly lower over the next 12 months.

"We can group postcode areas together using the characteristics of the locality and the people that live there using CACI's 'ACORN' classification system. Together with figures from their Mortgage Market Database, we can examine trends in house purchases in recent years to identify any shifts.

"Overall the pattern of transactions has been fairly stable, but the data indicates that there had been an increase in the proportion of sales occurring in more affluent areas and a similar reduction in less affluent areas.

"In particular, the proportion of house purchases in areas classified as 'Wealthy Achievers' has risen by three percentage points since 2008. These areas tend to be populated by those in managerial and professional occupations, and often include larger homes in suburban and rural locations.

"There has also been a small rise in the proportion of transactions in areas categorised as 'Comfortably Off'. These areas personify middle Britain, with a range of life stages
represented.

"One exception to the trend is the slight fall in the proportion of activity within areas of 'Urban Prosperity', typically populated by well educated professionals living within major towns and cities, which may reflect the subdued number of first time buyers at present.

"At the other end of the spectrum, the proportion of transactions accounted for by 'Hard Pressed' areas has fallen by two percentage points since 2008. This is not surprising, given the deterioration in economic conditions which is likely to have hit these areas hardest.

"'Hard Pressed' areas are characterised by lower levels of educational attainment and household incomes, and are often found within inner cities and post industrial towns."

He added: "There is a correlation between trends in activity and employment, which may help to explain these shifts, as shown in the charts below. For example, there has been a 6 per cent rise in employment in professional occupations since 2008, which is likely to have helped support housing market activity in 'Wealthy Achiever' neighbourhoods.

"Over the same period, employment amongst process, plant & machine operatives has fallen 13 per cent. Coupled with negative real wage growth, this is likely to have dampened activity amongst 'Moderate Means' and 'Hard Pressed'."


www.nationwide.co.uk


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