Scotland and London Had U.K. Housing Market’s Top Gains in 2011

Scotland outperformed the rest of the U.K. housing market in 2011 as financial services and the energy industry helped boost values in Edinburgh and Aberdeen, real-estate website Zoopla said today.

Home values in Scotland gained more than 6.7 percent last year, the most in the U.K., to an average of 164,844 pounds ($258,000), recovering from a slump that began in 2007. London had the second-biggest jump, gaining 2.3 percent to 416,890 pounds, amid tight supply and high demand, Zoopla said in a statement. The typical house price in Britain fell about 0.2 percent to 221,331 pounds for the year, according to Zoopla.

“National statistics on the housing market can mask differing fortunes in different parts of the country,” Nicholas Leeming, a director at Zoopla, said in the statement. “Londoners continue to see the market go from strength to strength with high demand for a limited number of properties.”

Housing demand nationwide weakened as banks curbed mortgage lending and consumers were squeezed by government spending cuts and tax increases aimed at narrowing the budget deficit. Britain has a 50 percent chance of slipping back into recession in 2012, the National Institute for Economic and Social Research said in November.

House prices in England fell 0.75 percent in 2011 to 228,926 pounds, led by a 5.8 percent drop in the northeast. An average home in the region now costs 156,659 pounds, according to Zoopla.

“The northeast had a high public service dependency and that’s taking longer to recover,” Leeming said by telephone. “There’s no obvious substitute employer in the area.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE