With heavy public sector job losses predicted in the wake of this week’s Comprehensive Spending Review, property website Zoopla.co.uk has examined where house prices in England and Wales are likely to be hit the hardest.
Topping the list of local authority areas most likely to be negatively impacted is Oxford, where almost half of all workers (46%) are employed in the public sector. Average house prices in Oxford have already fallen by almost 4% over the past three years to a current level of £326,396.
Not far behind, and also likely to see falling houses prices as a result of the public sector cutbacks, are Cambridge, Middlesborough, Hastings, Canterbury, Stafford and West Dorset – all areas where public sector employment accounts for over 40% of the workforce.
At the other end of the scale, the areas least likely to be impacted by the cuts are the ones where public sector employment rates are significantly below average. Topping the list of places unlikely to see much impact on house prices is the City of London where only 4% of workers are employed in the public sector and average house prices now stand at £468,962, up over 3% over the past 3 years, according to Zoopla.co.uk.
Other local authority areas where property prices may be only marginally impacted by the cuts include Crawley, Corby, North Warwickshire, Broxbourne, North West Leicestershire and Bracknell Forest – all places where public sector employment accounts for under 15% of the workforce.
Nicholas Leeming, Commercial Director of Zoopla.co.uk comments:
“The country is braced for extensive cuts to government spending and a significant number of public sector job losses are anticipated over the coming years. In areas where more people are employed by the state, rising unemployment will lead to more homeowners struggling to pay their mortgages as well as dampening demand from buyers, which will put downward pressure on house prices in these areas.
"House prices are likely to be far more resilient in areas with a smaller share of public sector employees.”
