Do I need a geography lesson?
Surrey is in London and Bath is in the South East
13 February 2013, Words by Neal Hudson
Bath may actually be in the South West, Surrey in the South East, Norfolk in the East and Newcastle in the North East but trends in price growth suggest that’s not completely true in terms of housing markets.
The correlation between regional and local level price growth suggests that many markets actually have a stronger correlation with a region other than the one they are physically in as house price growth radiates outwards from London over the course of a housing market cycle.
Some interesting trends highlighted by the analysis:
- Surrey and the M4 corridor have a higher correlation with the London average than the South East.
- eastern London boroughs perform more like the South East and East of England than London.
- Milton Keynes has a stronger correlation with the East of England average than the South East.
- Norfolk and Suffolk correlate more with the South West average than the East of England average.
- Bath & North East Somerset, Bristol and Wiltshire are more closely correlated with the South East than the South West.
- Birmingham correlates more with the East Midlands and Solihull correlates more with the South West than the West Midlands.
- York and Newcastle behave like the East Midlands.
Unsurprisingly, given the strength of international demand, the central London boroughs of Kensington & Chelsea, Westminster, Camden and Hammersmith & Fulham have a relatively low correlation with the London or any other regional average suggesting they really are in a world of their own.
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