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Housing market set to be hit by public sector job cuts

18th October 2010

  • Government cuts will see job losses rise and house prices fall in many areas
  • Oxford house prices likely to be hit hard with 46% employed in public sector
  • City of London likely to be unaffected by cuts with only 4% in public sector work

Property prices in areas with high rates of public sector employment are set to take a disproportionately hard knock over the coming months. With heavy public sector job losses predicted in the wake of this week's Comprehensive Spending Review, leading property website 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 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 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."

Top 20 areas likely to be most affected

Rank Local Authority
% of workforce employed
in the public sector
Current avg.
property value
3 year
% change
1 Oxford 46 £326,396 -3.61%
2 Denbighshire 45 £146,289 -9.06%
3 Cambridge 43 £306,521 -6.88%
4 Middlesbrough 43 £117,623 -8.53%
5 Hastings 43 £164,255 -5.19%
6 Ceredigion 42 £185,569 -7.53%
7 Canterbury 40 £224,699 -10.11%
8 Stafford 40 £188,162 -8.54%
9 West Dorset 40 £271,555 -9.22%
10 Merthyr Tydfil 39 £94,854 -7.85%
11 Sefton 39 £170,518 -9.66%
12 Liverpool 39 £132,083 -10.21%
13 Greenwich 39 £276,512 -3.64%
14 Taunton Deane 39 £214,130 -9.03%
15 Lewisham 39 £265,822 -3.42%
16 Swansea 38 £151,570 -9.47%
17 Eastbourne 38 £207,468 -7.88%
18 Newcastle upon Tyne 38 £166,890 -9.10%
19 Blackpool 37 £114,300 -14.58%
20 Gwynedd 37 £155,043 -8.70%

Source: and ONS

Top 20 areas least likely to be affected

Rank Local Authority
% of workforce employed
in the public sector
Current avg.
property value
3 year
% change
1 City of London 4 £468,962 3.14%
2 Crawley 12 £211,235 -5.82%
3 Corby 13 £132,191 -8.61%
4 North Warwickshire 14 £173,686 -9.31%
5 Broxbourne 14 £260,362 -6.00%
6 NW Leicestershire 14 £175,327 -8.16%
7 Bracknell Forest 14 £271,346 -6.80%
8 Hillingdon 15 £289,043 -5.04%
9 Tamworth 15 £151,501 -9.11%
10 Three Rivers 16 £389,658 -5.34%
11 South Holland 16 £152,377 -10.41%
12 Harborough 16 £239,865 -8.49%
13 Slough 16 £202,182 -8.93%
14 Thurrock 17 £186,756 -7.21%
15 Hertsmere 17 £367,525 -5.16%
16 Tower Hamlets 17 £329,663 -3.74%
17 Trafford 17 £239,271 -9.41%
18 Woking 17 £344,991 -5.66%
19 Flintshire 17 £164,483 -9.84%
20 Hounslow 17 £328,716 -5.47%

Source: and ONS

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