The recent news that the UK has tipped into the largest recession was a blow to the property market. Although a decline in house prices now seems inevitable. Lettings and Estate agent, Benham and Reeves have revealed the most recession-proof property hotspots in the UK, based on the last recession.
Benham and Reeves looked into the house price growth during the last recession in 2008 to reveal the pockets of the UK that performed best. House prices fell by -12.9 per cent overall between April 2008 and June 2019. However, five areas actually saw house prices increase.
The most recession-proof property hotspots
In the Orkney Islands, of the coast of Scotland, prices rose by 21.7 per cent. In the Western Isle, they jumped by 18.4 per cent. Powys in Wales, saw prices rise by 3.1 per cent. While in Moray they rose by 2.7 per cent, and by 1.4 per cent in the Scottish Highlands.
Overall, Northern Ireland was the hardest hit by the last recession with prices dropping by – 23.9 per cent. The East of England saw a drop of -14 per cent, with London dropping by -13.8 per cent. Scotland saw the lowest impact on house prices, with them dropping by just – 5.2 per cent.
However, before we start panicking about house prices dropping it is important to note that the housing market is performing strongly at the moment. The latest Zoopla house price index revealed that house prices were likely to rise by 2-3 per cent by the end of the year.
‘News of a recession will no doubt bring another wave of doom and gloom from house price profits but that simply isn’t what we’re seeing on the ground,’ explains Marc von Grundherr, Director of Benham and Reeves. ‘And with such a tidal wave of activity returning, it’s unlikely to materialise for many many months, if at all.’
‘Our research shows a recession doesn’t necessarily mean a cataclysmic decline in property prices,’ he adds. ‘In fact, some areas weathered the last recession pretty well considering the wider economic picture. The vast majority of areas saw a quick recovery in property prices in the years that followed.
‘For those investing now the long-term, the value of their bricks and mortar investment should come good when they do come to sell. When you also consider the saving on offer with the current stamp duty holidays in some parts of the UK, now is a great time to get on the ladder.’