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News: UK reigns supreme in Europe

Mon, 03 Sep 07

House prices in the UK have risen more rapidly than every country in the eurozone except Spain over the past five years, according to new research by Halifax...

Since 2001, house prices in the UK have risen 90%, compared with a 40% increase for the eurozone as a whole over the same period (see Table 1).  Spain is the only country with higher house price growth than the UK in the past five years, with an increase of 100%.

In the past year, Belgium experienced the largest rise in house prices of 18%, followed by France at 15% and Spain at 14%.  The UK had the fourth-largest increase of 13%.

Of the 12 eurozone members included in this analysis, Germany is the only country to have experienced a fall in house prices, with a fall of 5% over the past five years. 

Table 1: House price growth in UK and eurozone

1 year

2 years

5 years

Spain

14%

57%

100%

UK

13%

30%

90%

France

15%

48%

73%

Ireland

12%

33%

71%

Belgium

18%

39%

60%

Luxembourg

0%

24%

58%

Greece

11%

20%

56%

eurozone

8%

24%

40%

Netherlands

5%

15%

38%

Finland

6%

21%

29%

Portugal

0%

2%

7%

Austria

5%

3%

6%

Germany

-2%

-4%

-5%

Sources: Halifax and European Central Bank

Despite rising faster than the UK over the past five years, house prices in Spain are lower.  The average price in Spain stood at £150,200 at the end of 2006, compared with an average of £187,100 in the UK.  The average house price in Ireland (£209,300) and the Netherlands (£190,900) is higher than in the UK. (Table 2)

Table 2: Average house prices in selected countries (£)

2005

2006

Ireland

£190,700

£209,300

Netherlands

£185,700

£190,900

                     UK

£170,100

£187,100

Spain

£134,500

£150,200

France

£105,600

£119,300

Belgium

£101,200

£117,600

Finland

£88,600

£92,300

Sources: Halifax and European Central Bank

The owner-occupation rate in the UK is currently around 70%. Spain has a significantly higher owner-occupation rate of 82%, whereas the Netherlands has a lower owner-occupation rate of 55%.  In Germany, the rate is even lower at 45%.

Tim Crawford, group economist at Halifax, said: "UK house prices have risen more rapidly than in its eurozone neighbours over the past five years.  House price growth, however, has slowed in the past couple of years compared with the likes of Belgium and France recording bigger increases.  Two of the largest economies surveyed – the US and Germany – are the only ones to have seen a fall in house prices."

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