Residential Sales Value Portal
Welcome to Lambert Smith Hampton’s Residential Sales Values Portal (RSVP), your visual guide to residential per sq ft values across the UK. The map utilises a variety of statistics to illustrate key residential pricing indices at the local authority level. Simply click on the map below to assess residential values, property prices and prevailing affordability levels across the UK.
Notes: Right click to zoom in. If map values are not being displayed, please delete cache from your browser
|AVG PER SQ FT||2022/23||Average price per sq ft for property||Local Authority||LSH Research, Property Data|
|AVG PER SQ FT LOCAL AUTHORITY RANGE||2022/23||Maximum and minimum average price per sq ft of postcode sectors within local authority||Local Authority||LSH Research, Property Data|
|AVG PROPERTY||Q4 2022||Average transaction price for property||Local Authority/Council||Land Registry, Ulster University|
|AVG PROPERTY PRICE 12 MONTH CHANGE||Q4 2022-Q4 2021||12 month % change in average transaction price for property||Local Authority/Council||LSH Research|
|INCOME PRICE RATIO||2022||Ratio of median house price (existing dwellings) to median gross annual (where available) residence-based earnings||Local Authority||ONS|
While tightening financial market conditions will likely usher in a period of falling house prices, the correction in commercial property values has been much more severe.
Alongside our latest interactive map on per sq ft residential values, here we provide additional context on the latest trends, with regard to regional variations, growth and the relative position of residential values vis-à-vis the core commercial property sectors.
Economic headwinds drive price slowdown
According to Land Registry figures, average UK house prices increased by 9.8% in 2022. Strong as this is, changing financial conditions and rising interest rates saw the rate of growth slow appreciably towards the end of the year. Growth in the second half of 2022 amounted to a relatively modest 3.7% and finished in negative territory by the end of year, with average prices falling by 0.4% in the month of December.
With inflation figures for January still in double digits and mortgage rates now reflecting levels last seen in the aftermath of the GFC, the housing market will be relatively challenging over the coming year. However, chronic undersupply and effective discounts for overseas buyers due to a weakened pound will help to mitigate against severe price falls. In addition, lack of supply is underpinning resilience in the private rented sector (PRS), with affordability challenges in the private sales market continuing to underpin demand and rental growth.
While the forecasts of leading economists vary, all generally point to falling average prices for 2023. Forecasts range from a fairly modest price fall of -2% up to -10% for the year as whole, with most of the correction coming in the first half of 2023 and relative stability returning by year end.
Inner London lags
The wider impact of the pandemic on working patterns and housing demand continued to be reflected in 2022, albeit to a lesser degree than 2021. On a regional basis, average prices in Scotland saw the weakest growth in 2022, rising by 5.7% over the year, followed by London with annual growth of 6.7%. In contrast, the North West and East Midlands recorded the strongest annual growth, at 12.2% and 12.3% respectively.
Across the UK’s 374 local authority districts, parts of Wales saw amongst the strongest upward price movements during 2022 - nine districts in the principality experienced double-digit annual house price growth, led by Blaenau Gwent, where prices shot up by 23%. Other notable locations for growth included Maidstone, Peterborough and West Lancashire, all of which saw average house prices increase by circa 20% over the year.
On the flipside, seven UK districts saw falling average prices during 2022, six of which were inner London districts. Westminster endured the most severe price drop of any UK district in 2022, with average prices falling by 13%. Despite this, London overall still saw average growth of 6.7% in 2022, with a weak showing in the prime central areas offset by notable price increases in the outer districts such as Bromley and Sutton, where prices grew by 10% in 2022.
Regional value contrasts
Despite weaker growth in the capital compared with most other UK regions during 2022, London maintains values at two and a half times the UK average. London’s £709 per sq ft average value is, of course, heavily skewed by central prime areas such as Kensington and Chelsea, where latest house prices translate to £1,429 per sq ft. However, even when London’s prime inner districts are excluded, the rest of London’s average value of £588 per sq ft still stands 52% above the next highest UK region of the South East, at £387 per sq ft.
The North East sits at the other end of the pricing spectrum, with the average price breaking down to £159 per sq ft. Elsewhere, latest average values across the North West, Yorkshire & the Humber, the East Midlands and West Midlands range between £200 - £240 per sq ft.
Intra-regional pricing variance
The district spread of average values within the UK regions remains the tightest in the North East, where a range of £130 per sq ft (Hartlepool) to £195 per sq ft (Newcastle) is just 51%. The second lowest intra-regional variation between districts is seen in the South West, where the average price spread is 61% between the most expensive and least expensive districts.
Beyond the extremes associated with London, the East of England exhibits a substantial 71% spread in average prices between its constituent districts. This is explained by the wide variability of access into London associated with the region. Average values in Hertsmere, St Albans and Three Rivers exceed £500 per sq ft, more than two and a half times those in Great Yarmouth, where travel into London takes roughly three hours.
A COMPARISON WITH COMMERCIAL
The change in financial conditions during 2022 prompted a significant and rapid correction in commercial property values, much more severe than the adjustment thus far seen in the residential market. While the rate UK house price growth slowed through 2022, annual growth of 9.8% stands in stark contrast with the 11.2% fall in average commercial property values seen over the year.
Industrial bubble pops
The long and strong run of the UK industrial and logistics investment market came to an abrupt halt in H2 2022. According to MSCI, UK industrial values fell by 17% over the 12 months to December 2022, the sharpest correction of any sector. Extremely low yields in the sector proved unsustainable in the face of increased borrowing and construction costs, making a sharp readjustment in values unavoidable.
The recent and extreme correction seen in the industrial sector has seen it usurped by residential as the lead-performing property sector in the UK for capital growth over both the one year and three-year time frame. However, industrial remains the best performer over the longer, 10-year time frame with average annual capital growth of 7.4% compared with 5.7% p.a. for residential.
Offices underperforms retail in 2022
While retail has been heavily impacted from structural changes to shopping patterns over the past decade, the focus of capital value decline switched towards the office sector amid the recent financial chaos. Average UK office capital values fell by 13% in 2022, placing the value decline over the three-year time frame into comparable territory with retail. While the price correction for UK retail appears to have passed its peak, the structural effects of the pandemic on working patterns will increasingly play out in the office sector over the coming years, albeit focused primarily on secondary quality assets.
Comparing values between sectors
The recent market correction has prompted notable changes in relative per sq ft pricing levels between sectors. For example, as a result of the recent shift, the East Midlands has joined the South East region as one of the few parts of the UK to see average residential values stand higher than average office values. Elsewhere, the relative premium offices display over residential has narrowed significantly in the past six months, with office values in the East of England now standing only 1% higher than average residential values.
The recent severe correction in the industrial and logistics sector has also resulted in the differential between industrial and residential values widening back to more typical levels. For example, at the peak of the market in mid-2022, average industrial values in the East of England were only 38% below average residential values. Now, following the correction, average industrial values in the region are 51% below residential values.
Rethinking mixed-use composition
Structural changes initiated by the pandemic and, more recently, the severe correction in parts of the commercial property market will have an important bearing on investor decisions. This is certainly true with regard to the design of mixed-use developments, with the relative changes in values between sectors playing an important role in decisions to allocate space between various uses.
For example, reflecting the recent boom in the industrial sector and the associated malaise in the retail sector, considerations around incorporating light industrial uses into residential-led schemes were gaining increasing traction over more conventional retail ancillary uses. However, the recent collapse in industrial values will arguably undermine such considerations over the short to medium term.
Meanwhile, in the residential market, increasing evidence of resilience in the private rented sector over the private sales market in 2023 could have the effect of channelling more investment away from commercial uses and towards the burgeoning build to rent sector. As a consequence, a greater component of mixed-used schemes could therefore be devoted towards catering specifically to the private rented market.
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