Owners of properties in spa towns across England and Wales have seen the value of their home rise by nearly £130,000 over the past decade, according to the latest research from Lloyds TSB.
The average house price in the eighteen England and Wales spa towns rose by £129,203 from £146,194 in 2001 to £275,397 in 2011. The 88 per cent increase in the average property price is equivalent to a monthly rise of £1,077.
The rise in spa town house prices since 2001 was 12 per cent (or £13,595) greater in monetary terms than the average increase in overall property prices across England and Wales – £129,203 against £115,608.
Home buyers are required to part with more than an extra £48,000, on average, to live in a spa town. House prices in spa towns in England and Wales are on average £48,123 (27 per cent) higher than the average price in their county. This was almost double the average premium of £26,834 in 2001.
House prices command a premium relative to the surrounding area in sixteen of the eighteen spa towns in England and Wales. Homes in Ilkley, West Yorkshire (96 per cent or £143,388) currently command the highest premium, followed by Boston Spa (85 per cent or £127,634) and Bath (53 per cent or £109,675). In contrast, the Powys spa town of Llandrindod Wells, trades at the largest discount to its county average (-12 per cent or -£21,753).
Five spa towns have seen house prices more than double in the past decade. The largest increases were in Builth Wells (170 per cent) and Llandrindod Wells (109 per cent) – both in Powys in Mid Wales. Harrogate in North Yorkshire (107 per cent) experienced the next biggest increase. At the other end of the spectrum, Epsom in Surrey (62 per cent) and the north Worcestershire town of Droitwich (72 per cent) recorded the smallest increases.
As a result housing affordability in spa towns has deteriorated in the past ten years. Spa town house prices in 2011 are, on average, 8.3 times gross annual earnings. This is up from 6.0 times gross annual earnings in 2001.
Suren Thiru, housing economist at Lloyds TSB, said: “Homes in spa towns continue to command a substantial premium over their neighbouring areas with the quality of life benefits and sense of history that typically characterise such locations still resonating amongst home buyers. However, as a consequence of rising property prices, housing market conditions in spa towns have become tougher over the past decade, particular for those looking to get on the property ladder for the first time.”
