Pandemic triggers house price increase in County Durham

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Recent data from the UK House Price Index shows that the average cost of a home in County Durham was £124,667 in October 2021.

This is the first time that house prices have exceeded the previous high of October 2007, when the average price had peaked at £122,337. This was before the ‘credit crunch’ of 2008 led to house prices crashing across the UK.

County Durham is among the last local authorities in England to see its average house prices recover to their pre-financial crash levels before 2008.

The data also reveals that most of the county’s recent increases in house prices has almost exclusively occurred during the Covid-19 pandemic in the last 12 months. Between January 2010 and October 2020 the average price of a County Durham home had fluctuated between £90,000 and £105,000, but in the last year, house prices rose by around £20,000, with the average rate of increase exceeding 10% per month throughout 2021.

The recent uptick in house prices has been experienced across the UK, as a combination of increased demand for more spacious properties, the stamp duty holiday which removed the tax on homes under £500,000, and the historic low rates on mortgages incentivized many people to purchase homes. County Durham was among regions that experienced this trend in terms of prices. Noticeably however, the actual number of homes being sold in the region has not increased overall during the pandemic, still falling short of the peak in 2007.

Within County Durham, some estate agents have argued that there are local disparities between prices which are masked by the overall figures. A partnership of estate agents across the county told The Northern Echo that “Houses in DH1 [Durham City] postcodes are, on average, £357,510, which has increased by close to 11 percent over the last five years.” Their figures for average house prices are also higher than that of the Land Registry, with the partnership giving an estimate of £136,000-£146,000.

“It’s sobering to think that parts of the country have only recently recovered”

Ross Nichols

The trends in house prices additionally show a divide between Northern and Southern regions. Areas like Durham, as well as Hartlepool, Blackpool and Middlesbrough have only seen their house prices reach their pre-financial crash peak this year, meaning it has taken these regions 14 years for their prices to recover. In comparison, areas such as London, Cambridge and St Albans saw their house prices recover within two years, with prices in London alone now 1.81 times greater than its pre-financial crash peak in 2007.

Ross Nichols, co-founder of ‘Just Move In’ told publications that “The housing market has exploded over the past year, but it’s sobering to think that parts of the country have only recently recovered to the levels they were before the 2008 crash.” He also highlighted that “there’s a North-South divide when it comes to the recovery, with London and other Southern cities bouncing back quickly, while Northern areas are still lagging behind.”

House prices are important indicators in assessing the overall health of the economy, with rising house prices a sign of increased consumer spending and confidence in the market. These figures do not include properties included for private rent, which in Durham have been a source of controversy as students seek to secure student homes in an increasingly competitive and expensive market, as seen in this year’s ‘housing rush’.

Image Credit – Emma Thompson

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