House prices have been falling slightly less in the West Midlands than across the UK, even though a small pick-up in mortgage lending reported by the Council of Mortgage Lenders on Tuesday appears to have by-passed the region.
Average West Midlands house prices fell by 12.1 per cent in the year to February, compared with a drop of 12.4 per cent across England as a whole, according to the Department of Communities and Local Government.
The DCLG numbers, based on completed transactions rather than mortgages agreed, showed prices paid by first-time buyers falling much more steeply than those by owner occupiers moving home.
First-time prices were down by 15.1 per cent in the 12 months to February, the DCLG said, while the average price paid by former owner occupiers fell by 11.2 per cent.
But this process was reversed during February, when first-timers’ prices fell by 1.2 per cent, against a slide of 3.2 per cent in prices paid by former owner occupiers.
Harvey Williams, West Midlands spokesman on housing for the Royal Institution of Chartered Surveyors, confirmed that more first-timers are being tempted into the market.
“The most important factor I have noted of late is the re-emergence of first-time buyers in the West Midlands region,” he said.
“The number of deals for first-time buyers has risen from 25 per cent to 35 per cent of total transactions completed.
“This is crucial as first-time buyers are the very lifeblood of the property market and an absolutely essential indicator of improving conditions being maintained.”
Across the UK, the average price paid by first-time buyers was £135,702, while that paid by former owner occupiers fell to £223,133, the DCLG said. Prices for flats continued to fall more steeply than those for houses, dropping by an average of 4.5 per cent between January and February. Detached houses fell by 4.3 per cent, reversing most of a 4.9 per cent jump recorded for January.
Prices for bungalows fell by 3.6 per cent this February, those for terraced houses by 2.0 per cent, while semi-detached house prices slipped by 1.8 per cent during the month.
Ed Stansfield, property economist at Capital Economics, said: “The full impact of rising unemployment, a rise which we believe has much further to go, has yet to be seen in the housing market data.
“As such, we think any recovery in activity levels this year will be very modest and will not prevent further substantial house price falls.”