Homeowners looking to get the best possible prices when selling their homes often ask their agents which factors have the biggest influence on house prices. Likewise, those looking to buy homes in the UK question why some properties of a similar specification command exponentially higher prices than others.
Now, research from the Office for National Statistics (ONS) suggests that there are three primary factors that affect property prices more than anything else.
Having studied property prices across a number of towns in England and Wales, the ONS concluded that the three most influential factors on house prices are as follows:
- The distance of the town from London
- The most common types of jobs carried out by the town’s residents
- The level of income deprivation in the town
Specifically, the study conducted by the ONS found that where a town was located within 125 miles of London, each 31 miles further from the city resulted in a property price decline of around £50,000.
Following this initial 125-mile distance, a home’s exact distance from London had less of an effect on its value.
In addition, the ONS reported that a 10% increase in the number of people employed within high-skill-level jobs within a town contributed an average of £25,000 to property prices. This encompasses high-level management positions and occupations that necessitate a degree-level education or higher.
The third of the factors was the proportion of people in the town experiencing deprivation on the basis of low income, which likewise had a major impact on property prices.
Outside the top three, the ONS reported that a town’s distance from the nearest city, the average age of its residents and the size of the town all had an impact on house prices, though to a lesser extent.
The findings followed a previous report from the ONS published late last year, which detailed how average house prices in UK towns in 2020 varied from £1,050,000 in Northwood, northwest London to just £39,000 in Ferryhill, Co Durham.
On average, house prices in the UK have increased by more than 10% over the course of the past 12 months. Regional disparities were clear in the findings, with six of the 10 towns recording the fastest property price growth being in the southeast of England. By contrast, six of the 10 regions with the slowest growth were situated in the northeast.
Average house prices continue to skyrocket across the UK as a whole, pricing millions of potential first-time buyers out of the market entirely. The latest figures indicate that the average price of a property in the UK is now £277,000 – up more than £27,000 on the same period last year.
It now costs around £296,000 to buy a house in England, £205,000 to buy a home in Wales, £181,000 to buy a home in Scotland and £159,000 to get on the property ladder in Northern Ireland.