Luton recorded the biggest percentage rise in house prices among major UK towns and cities over the past year, according to new research by Halifax.

Based on Halifax’s own house price data, the average house price in the Bedfordshire town was 19.4% higher than in the previous year, increasing from £214,934 to £256,636 in 2016. This is more than two and a half times the 7.5% increase in the UK as a whole. Luton is within easy commuting distance of London and has relatively low property prices.

The outer London borough of Barking and Dagenham experienced the second biggest rise in average house prices with an increase of 18.6%. Dunstable – Luton’s near neighbour – completes the top three with a 17.9% rise in the past year.

All 10 top performers are in London and the South East. Basildon (17.2%), Chatham (17.1%), Tower Hamlets (15.8%), Watford (15.3%) and Basingstoke (15.1%) also all recorded price rises that were at least double the national average.

A small number of towns recorded declines in house prices in 2016. By far the most significant fall was in Aberdeen (-6.9%) in Scotland.

There were also marginal price decreases in a number of other towns. In Scotland – Falkirk (-1.1%) and Inverness (-0.9%), in Northern Ireland – Bangor (-1.7%) and Londonderry (-0.4%) and northern England – Blackpool (-0.5%) and Stockton on Tees (-0.1%). Many of these areas are suffering from relatively weak employment and economic conditions, which continue to constrain local housing demand.

Martin Ellis, housing economist at Halifax, said: “Most of the areas that have seen the biggest house price rises during 2016 are either within close commuting distance of the capital or in outer London. Demand in these areas has risen as substantial property price rises in central London over the last few years have caused increasing numbers of people to seek property in more affordable areas.

“A few towns have experienced price falls, with the biggest in Aberdeen. On the north east coast of Scotland, it is highly dependent on the North Sea oil and gas sector. The substantial fall in oil prices in the past couple of years has hit the industry hard with adverse impact on demand for homes in the area. Price declines elsewhere have been modest.”