The Residential Property Market

Introduction

The Residential Property Market research monitor uses a variety of housing-related data sources. Website links are included for various public and private organisations that supply research and statistics for this topic area. The monitor is divided in to four sections to help distinguish the various information sources detailed in this article.

The Lancashire Profile Housing and Households section contains a number of research monitors that are closely linked with this topic area, including those on homelessness, housing conditions and housing benefit levels.

Section 1 has the house price information obtained from the HM Land Registry website. The Land Registry guarantees the title to, and records the ownership of, interests in registered land in England and Wales. The site includes a database that is updated monthly and has average house prices for the Lancashire County Council area, and the two unitary authorities of Blackburn with Darwen and Blackpool.

The second source of house price information comes from the Communities and Local Government website. The site contains a substantial amount of information on housing in general, and has quarterly house price figures down to the local authority level. The housing statistics section of the website contains a 'Live Tables' option (Table 581 has the district figures) that gives access to the local authority figures.

Section 2 provides brief details of orders made for Mortgage and Landlord Possession Proceedings in Lancashire. The data are derived from the website for the Ministry of Justice.

Section 3 has government figures on vacant dwellings that have been downloaded from the Empty Homes website. This site also contains information on initiatives to help tackle the problem of unused dwellings.

Section 4 contains housing results from the 2001 Census of Population for household spaces and vacancy levels.

Other websites

The Rightmove website claims to be the UK's number one property website. The house price search facility can list recent purchase prices down to six-figure postcode areas.

The Halifax UK House Price Index was launched in 1984. It is based on the lending of one of the UK's largest mortgage lenders and provides the longest unbroken monthly data series of any UK housing index.

Section 1 House Prices in Lancashire

A number of previous editions of this research monitor relied on house price information published each quarter on the Land Registry website. Changes in 2007 to the way the Land Registry publish local house price information resulted in district authority information becoming no longer readily available on the website. Figures for the Lancashire County Council area and the two unitary authorities of Blackburn with Darwen and Blackpool are still published, and these are now updated on a monthly basis. The complete set of monthly results for the year to June 2008 for these three areas is presented in Table 1.

In addition to the removal of district-level figures, the revised method of publication is producing average house price results that appear to be lower than the expected market values.

Stone-Built Terraced Properties in a Prime Commuter Location - Abbey Village, Chorley District

To mitigate the removal of district level results from the Land Registry website, the district authority figures published by the Department for Communities and Local Government have been listed in Table 2.

The figures in Tables 1 and 2 are correct at time of publication, but will be subject to revision as late completions are added to the official figures. It would be more accurate to delay publication for a few months before reporting the figures, but there is always an interest to know the latest position.

Past editions of this monitor are not amended each time the data are revised and therefore should not be used as a source for backdated figures.

Latest Figures for Lancashire

The latest available data from the Land Registry show that the average house price for the Lancashire County Council area was £134,633 in June 2008. The average is well in excess of the figures for the two neighbouring authorities of Blackburn with Darwen (£90,692) and Blackpool (£109,981) and is on a par with the regional figure of £134,337.

Average prices from the Land Registry site seem low in comparison with other house price data sets obtained from mortgage providers and other sources. The figures do however allow interesting relative comparisons between areas and between house types. For example, the table reveals the much higher average price for England and Wales (£180,781). In percentage terms, the Lancashire County Council area average was over 25.5% less than the national rate.

Table 1 highlights the price differentials between the four major house types. At the higher end of the market (detached) the variance between the county and national averages is not excessive, but for the Terraced and Masionette/ Flat sections, the differences between the county and England and Wales results are far more apparent.

Table 2 lists the Lancashire district figures from the Department of Communities and Local Government website for the fourth quarter of 2007. Lancashire County, the two unitary authorities, North West and England and Wales figures are also included.

Please note that the Housing and Households Area Profiles contain figures that map average house price changes by each authority in comparison with the county and national averages.

Differences between the Figures in Tables 1 and 2

The house price statistics published by the Land Registry and by the Department for Communities and Local Government use different methodologies to derive their figures.

It is difficult to easily summarise the reasons behind the variations between the two data sets, but in general it would appear that the Land Registry results measure house price growth by observing price changes for houses that have been sold more than once. Differences in the quality of homes sampled in any given month are therefore greatly reduced. The Land Registry results also remove seasonal variations.

In contrast, the figures in Table 2 are probably a more accurate reflection of average house prices in each area as viewed from the perspective of people buying houses on the open market. The figures in Table 2 exclude sales at less than market price (e.g. Right to Buy), and sales below £1,000 and above £20m. The exclusion of the 'Right to Buy' results in particular may artificially increase the average figures.

Lowest House Prices in England and Wales

Of the 376 district and unitary authorities that cover the whole of England and Wales, Burnley recorded the second lowest average price at £101,707. Blaenau Gwent was the authority that recorded the lowest figure: £100,278. Hull and Stoke-on-Trent occupied third and fourth places respectively, whilst Hyndburn was in fifth place and Pendle was in eleventh position. In contrast, Fylde recorded the 187th highest figure whilst Ribble Valley had the 216th highest result.

Section 2 Mortgage and Landlord Possession Proceedings in Lancashire

The fact that house prices had risen significantly for a number of years, but there has now been a reversal of fortunes has left a number of people facing difficulties. Some are experiencing problems servicing large mortgages whilst others are finding it difficult to sell in a stagnant market.

The Ministry of Justice publishes details of mortgage and landlord possession statistics. Table 3 presents the latest information for the organisation's offices in the broader Lancashire, North West England and for England and Wales.

Please note that the 'Orders Made' figures in Table 3 result from a judicial hearing and may lead to a grant for an immediate order for possession. This entitles the claimant to apply for a warrant to have the defendant evicted. However, even when a warrant for possession is issued, the parties can still negotiate a compromise to prevent eviction. Since many of the orders are not enforced these figures do not reflect how many properties have been taken into possession.

Table 3 reveals that for the first quarter of 2008, at the national level, mortgage possession orders increased by 11% to reach 26,930. Landlord possession orders were up by 6% to 28,366.

Of the five centres in the county for which results are published, mortgage possession orders increased substantially in each area, whilst for landlord possessions the numbers were more volatile. The figures reflect the slowdown in the housing market and future increases in possessions are to be expected given the present state of the economy.

Please note that complimentary information on the Council of Mortgage Lenders website is available. The site has UK level statistics on mortgage lending, arrears and possessions, payment protection insurance and buy-to-let.

Section 3 Vacant Dwellings

The Department for Communities and Local Government collects data on the number of empty homes from each local authority in England and from other Government departments and bodies.

A vacant dwelling is defined as a unit of residential accommodation that is empty at a particular point of time. This includes dwellings that are empty between change of occupants or undergoing modernisation, repair or conversion, awaiting demolition, or newly completed but not occupied.

It is necessary for a proportion of the housing stock to be empty at any point in time to enable the process of buying, selling and letting to work efficiently. It is also inevitable that properties will be empty when undergoing repairs and improvement. These are known as transactional vacancies and most are brought back into use quickly and without intervention. It is estimated that the effective minimum level of empty homes as a result of these processes is around 2% of the housing stock.

Not all properties are quickly brought back into use and Table 3 details the number of empty homes in Lancashire by district for April 2007. It also includes comparative data for the North West and England.

Highest Percentages of Empty Homes in England

An analysis of the figures for all authorities in England for 2007, reveal that the percentage of empty homes recorded in Burnley (7.47%) was the highest in England. Stoke-on-Trent (6.72%) was ranked in second place, whilst Pendle (6.65%) and Hyndburn (6.36%) were in third and fourth places respectively.

Yearly Percentage Changes

For England as a whole there was a 3% increase in the number of empty homes in the year to Aril 2007, to 672,924. The North West recorded a yearly increase of 4.2%, whilst the situation for Lancashire was slightly worse with a 4.3% increase.

The Lancashire district figures are quite volatile and local knowledge would be required to explain some of the dramatic shifts. The neighbouring authorities of Chorley and South Ribble recorded substantial yearly changes in opposing directions. This implies an administrative anomaly that affects both areas, but this is purely speculative.

Section 4 Housing Information from the 2001 Census

Demolition in East Lancashire - Bramble Street, Burnley

The information in Tables 5 and 6 has been downloaded from the ONS Neighbourhood Statistics website and provides an opportunity to compare the census data with the results in Table 4. This short report does not detail the definitional variations between the two data sets but just presents the figures at face value.

The 'household spaces' figures in Tables 5 and 6 include details of all household spaces which are either detached, semi-detached, terraced, flat, maisonette or apartment, part of a converted or shared house (including bed-sits), flat, maisonette or apartment in commercial building or caravan or other mobile or temporary structure. The household spaces are classified as either with residents, vacant or secondary residences/holiday accommodation.

Tables 5 and 6 highlight the problem of vacant household spaces within a number of Lancashire districts. Only four Lancashire authorities recorded vacancy levels that were below the England and Wales average of 3.2%. Table 6 lists the areas within England and Wales with the highest vacancy rates. Burnley had the second highest vacancy rate in England and Wales whilst three other East Lancashire Districts of Pendle, Hyndburn and Blackburn with Darwen are listed in the top 11 areas for vacancy levels. The appearance of Westminster in Table 5 emphasises the fact that a very small number of areas with very high demand (including the exclusive Kensington and Chelsea area) can also exhibit high vacancy levels for presumably very different reasons.

No district in Lancashire is significantly popular as an area for second homes. Only Fylde and West Lancashire, both with 0.9%, exceed the England and Wales average of 0.7%. In comparison, areas to the north of Lancashire, including South Lakeland (7.7%) and Eden (6.2%), are all popular areas for second homes.