The three biggest factors that determine property prices in your town

·3-min read
General view of for sale signs outside a block of flats.
House prices continue to rise and there are three main reasons why. (PA)

The three most important factors when it comes to influencing property prices in towns in England and Wales have been revealed by new analysis.

The distance of the town from London; the types of jobs carried out by the town's residents and the level on income deprivation in the town are the characteristics which are most crucial, the Office for National Statistics (ONS) found.

The ONS used a machine learning model to pinpoint the three most significant factors.

The analysis found that for towns within 200km (125 miles) of London, every 50km (31 miles) further away from the capital was associated with a reduction in house price of about £50,000.

A member of the public looks in the window of an estate agents in South Kensington, London, as the banking chain Halifax has reported that house prices have edged up by 0.4\% month-on-month in November, but there are more signs that the pace of growth is slowing.
The average house price in towns in England and Wales is mainly dependent on three criteria, the Office for National Statistics said. (PA)

Read more: UK house prices post biggest jump in six months

After that first 200km away from London, the effect of distance on price weakened, the ONS said.

Secondly, a 10% increase in the number of people in the town employed within job types with the highest skill levels was linked to an increase in house price of about £25,000.

These were "professional" occupations and high-level management positions that required a degree or equivalent experience.

Thirdly, as the percentage of people experiencing deprivation because of low income increased, the average house price dropped.

The study found that the size of the town, the age profile of its residents and the distance to the nearest city (not London) had some influence on house prices, but these were less important on the main three factors.

The ONS used property transactions for towns in 2019 to carry out its study.

The data follows a previous ONS report, published last October, which revealed that the average house price in towns in 2020 varied from £39,000 in Ferryhill, Co Durham, to £1,050,000 in Northwood, north west London.

File photo dated 14/10/14 of sold and for sale signs. House prices increased by more than �24,500 on average in 2021, marking the largest annual cash rise since 2003, according to an index. The typical UK property value hit a new record high of �276,091 in December 2021, Halifax said. Issue date: Friday January 7, 2022.
The average house price in the UK has risen by more than 10% in the past year. (PA)

Of the 10 towns with the highest house prices, six were in the South East, while six out of the 10 lowest were in the North East.

Figures published last week by the ONS revealed that the UK's house prices continue to soar.

The average house price rose by 10.9% over the year to February 2022, up from 10.2% in January 2022, the ONS said.

It means the average home costs £277,000, £27,000 more than the same period last year.

In England, the average house price increased over the year by 10.7% to £296,000; in Wales by 14.2% to £205,000; in Scotland by 11.7% to £181,000 and in Northern Ireland by 7.9% to £159,000.

London was once again the region with the lowest annual growth, at 8.1%.

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