Healthy housing market supports prosperity in the South West, finds new Barclays research

News
07/09/2017


  • Third edition of the UK Prosperity Map from Barclays Wealth & Investments finds a mixed picture of prosperity in the South West
  • House prices in the region have grown 5% in the last year
  • The number of millionaires in the South West has increased by 10.5% to 52,500


A mixed picture of prosperity in the South West emerges from macroeconomic trends, with indicators like house prices rising but overall prosperity dropping two rankings, according to the annual UK Prosperity Map from Barclays Wealth & Investments.


Prosperity Score Index

Against a backdrop of fluctuating economic conditions and Brexit negotiations, the 2017 UK Prosperity Map shows that, while most areas of the country are more prosperous overall than last year, in many cases cities are outpacing their wider region.

Bristol, for instance, ranked fifth out of 10 cities for prosperity, while the South West dropped to the sixth most prosperous region in the UK.

The UK Prosperity Map uses factors including numbers of millionaires, average earnings, business growth rates, house prices, and GDP per capita to generate a unique ‘Prosperity Index Score’ for each UK region and city.


House prices on the rise

A healthy housing market is contributing to the positive prosperity trends in the South West.

Average house prices in the South West are £247,798.

This is the fourth highest in the country, behind the East of England, the South East and London.

Prices have jumped by 5% over the last 12 months, the fourth greatest increase in the UK.


GDP growth stays steady as region faces mixed prosperity forecast

The research revealed that GDP per capita in the South West has grown by 2.0%, remaining steady as the fifth-highest in the country at £23,031.

However, despite having the lowest out-of-work rates in the UK last year, unemployment has risen by 0.2% to 4.1%, dropping two rankings, now sitting below Eastern England and the South East

Household spending also decreased by 0.8% to £529 per week, alongside slowly growing earnings – for which the South West ranks eighth out of 12 regions with an average annual salary of £24,907.


Boost to number of millionaires

There are now 52,500 millionaires living in the region, an increase of 10.5% since last year. This accounts for 8.4% of all millionaires in the country and a 0.2% share increase on last year.


Bristol fifth most prosperous city

London continues to dominate as the UK’s most prosperous city, but Bristol remains strong in fifth place.

Its unemployment is one of the lowest in the country at just 5.0% - compared to London’s 5.7% and Birmingham’s high of 8.7%.

The city’s GDP per capita is noticeably higher than the region as a whole, at £30,850.

It is also proving attractive to businesses and has a thriving start-up scene – the region is 10th nationally for business birth-to-death ratio at 1.35, with Bristol proving to be a hub with a ratio of 1.53 businesses created for every closure.


Signs are good for future growth

Eileen Cronin, Regional Director, South West region, Barclays Wealth & Investments, said:

“The last twelve months have seen fluctuations in the UK economy, and while we have seen a slight decline in the South West’s overall relative prosperity, it’s encouraging to see that house prices in the region remain strong in such an environment.

The region’s ability to have a stable GDP per capita is a good sign for future growth.

Bristol has a healthy start-up scene, which is helping the region attract more entrepreneurs.

The South West offers a good work-life balance, and we’ve seen a trend of smaller businesses moving out of London to set up in the region.

These factors are offering an optimistic business outlook for the South West in coming years.”