Shetland and the Western Isles are among the top areas in the United Kingdom for falling unemployment and rising house prices, according to new research.
The average house price in the Shetland Islands has more than doubled – a rise of 104 per cent in the past decade to £153,782 according to the Bank of Scotland, while the Western Isles saw an increase of 78 per cent during the same period.
Among the other top areas in Britain were the London borough of Hackney, which recorded an 84 per cent rise in house prices, followed by Southwark in south-east London, which alongside the Western Isles, saw a rise of 78 per cent in house prices.
The London boroughs of Lambeth and Tower Hamlets took fifth and sixth spots, with rises of 76 per cent and 72 per cent respectively.
The bank research looked at house price performance in the ten areas with the smallest rises in the claimant count unemployment rate over the past ten years.
Each of the areas studied has experienced a fall in the unemployment rate by between 1.1 per cent and 1.8 per cent since 2004. The areas outperformed the rest of the UK, where the average property prices have grown by just 22 per cent over the same period, while the recorded unemployment rate is actually 0.5 per cent higher.
Yesterday Nitesh Patel, a housing economist at Bank of Scotland, said: “In general, house price growth over the past decade has been stronger in the areas that have seen the biggest falls in the unemployment rate as measured by the claimant count. Areas in northern Scotland and inner London have generally outperformed other areas on both house price performance and a lower unemployment rate.
“During the recession of 2008-09, property values fell across most areas, even where the unemployment rate rose only marginally. This does highlight that while unemployment is important there are also other factors that drive house prices, such as affordability, earnings growth and low housing supply which will have contributed to rising prices in the earlier year.”
The Shetland Islands have been enjoying a boom in business as a result of their proximity to oil and gas fields, as well as enjoying a cultural renaissance triggered by the success of the BBC1 drama, Shetland, which has recently been commissioned for a third series.
Paul Riddell, the former editor of the Shetland Times, and director of Platform PR, a public relations company based in Shetland, said yesterday the figures were not surprising given how busy the islands have been in recent years.
He said: “I think property prices are increasing and unemployment is dropping because Shetland is booming at the moment.
“Total, the French oil and gas company, are building a giant gas plant here and there is a lot of other economic activity on the islands. You only have to listen to the taxi drivers out at the airport talking about how there is not a hotel room free on the islands to know how busy it is.
“Property prices are rising because there is also a small pool of homes, but these can be skewed at times if commercial properties are included into the mix.”