Areas of strong economic activity see house prices go up by over £110,000

UK property prices have risen by £110,000 in the past decade in areas where there has been strong economic activity, according to new research.

Halifax has released its review of economic and house price performance at a local level and found that between 1999 and 2009 the value of a typical home in the ten areas with the biggest increase in financial movement went up by 145 per cent (£109,269).

This is equivalent to a weekly increase of £228, from an average of £75,222 in 1999 to £184,491.

Martin Ellis, housing economist at Halifax, said: "The marked differences in local economic performance across the UK appear to have had a significant impact on the housing market over the past decade. House price growth has generally been stronger in the areas that have seen the biggest increases in economic activity. The best performing areas have also been the most resilient in terms of house prices during the downturn since 2007."

London properties for sale benefitted from a 91 per cent increase in economic activity, which saw house prices rise by 123 per cent. North Lanarkshire's financial movement was up by 70 per cent and the region's homes increased in value from £55,720 to £124,092 – a 123 per cent rise.

"Looking forward, the pace at which the UK economy recovers will be a key determinant of the outlook for the UK housing market. Similarly, those areas that perform best in economic terms are likely to fare best in terms of house price movements," Mr Ellis added.

Brighton and Hove recorded the largest rise in house prices (206 per cent) and it was also included in the top ten best performing areas in terms of increases in economic activity, while the cost of a house in Cornwall and the Isles of Scilly has gone up by 198 per cent between 1999 and 2009 – it was the sixth fastest growing area for economic activity at 60 per cent.