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London was the best performer for 11 years out of that 18-year stretch. By Emma Rowley 9:30PM BST 11 Aug 2013 Someone who had bought and then sold in the best performing local housing market for each of the last 18 years would have enjoyed a near 2,200pc return on their initial outlay, according to data from estate agency Savills. Taking a less specific view of the UK housing market, by picking the best region each year, the return would have been 549pc, or £5.5m, researchers said. Those figures compare to a headline 158pc average return on the value of housing across England and Wales as a whole for the same period. The research was based on Land Registry data tracking the market from 1995 to the end of 2012. In terms of region, London was the best performer for 11 years out of that 18-year stretch. The worst performances were more evenly spread across the country, although the North East appeared the most on that list, seven times during the period. However, despite the progress in the capital’s market in recent years, the numbers show that the best returns would have been achieved by moving about. Lucian Cook, director of residential research at Savills, said it was a question of “picking the leading and lagging regions over the course of a housing market cycle”. To have followed the strongest regional performances, “would have meant focusing heavily on London in the early years of the recovery – skipping investment in the South East of England – and moving onto the markets of the East of England and subsequently the East Midlands and North East.” Looking at the market on a more local basis, the expensive London neighbourhood of Kensington and Chelsea appeared most frequently. But it was Blaenau Gwent in South Wales that saw the biggest yearly increase, with a 43pc rise in house prices in 2004. That same area also performed badly enough in 2000 to be the worst performer that year, with a fall of 4pc. While Savills acknowledged that no one will have played the property market with that level of acumen, the figures point to the returns that could have been made – and also to the losses. By picking the worst performing local area over the 18 years, the hypothetical investor would have made a 68pc loss on a £1m starter pot, left with a property worth just £324,000. The pain in terms of worst regions is not so dramatic: here, the investor would have made 5pc gain over the period, or £54,718. However, the figures for potential returns have not been adjusted for inflation, which means that would have been a “real” term loss. Looking ahead, Mr Cook said that London’s outperformance looked likely to continue for a few more years. In collating the data, Savills stripped out particularly volatile areas, which tend to be the smaller markets. Continue reading →