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Record house price premium to live in cities

Monday, 3 October 2011 12:00 AM

Home buyers are paying a record premium to live in cities, according to a new survey by the Halifax bank.

House prices in cities are on average 7 per cent, or £14,462, higher than their county average, it said. This is the highest premium since its records began in 1983.

The survey found that 56 per cent of cities had a higher average house price than their county average. Seven of the ten with the highest premium are in the south of England.

Winchester is leading the way with prices 77 per cent above the average for Hampshire, followed by Westminster (74 per cent above Greater London). Lichfield (58 per cent over Staffordshire) has the highest premium outside the south.

House prices in cities have risen 65 per cent over the last decade from an average of £105,000 in 2001 to £173,000 now. That works out at £131 a week.

Suren Thiru, housing economist at the Halifax, explained: “City house prices are generally supported by demand from those looking to gain from the economic and lifestyle benefits often associated with residing in major urban areas, as well as by the pressures on the housing supply that often typify such locations."

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