The boom in city centre flats has seen house prices in Birmingham rise at a slower rate then other parts of the region over ten years, figures reveal.
Research showed the average price of a home in the city rose by just 18 per cent in the past 10 years, to £168,590.
But in Coventry prices rose by 33 per cent, while property values rose by 27 per cent in Staffordshire, Herefordshire and Shropshire.
Estate agents believe the greater proportion of city centre apartments in Birmingham is likely to have impacted on the average price, with most of the damage done around the start of the financial crash in 2008.
However, they believe city centre living could be on the cusp of something of a renaissance, with demand strong following years without new developments.
Mark Evans, partner at Knight Frank’s Birmingham office, said: “If you look back from 2003 to 2007 there were some significant price increases and then in 2008 the world changed and prices deteriorated – in some instances enormously.
“If you take Birmingham city centre, over a period of time there was a fall of 30 to 40 per cent.
“There was a real skew in 2007 to 2008 – where some areas decreased enormously.
“In terms of the Birmingham statistics you will probably find that the city centre will have impacted as that was a bigger market here in comparison to Coventry.”
The data comes from the latest house price research from Nationwide which showed house prices have recorded their fastest growth in almost three years in a further sign that the market is gathering pace.
The annual increase of 1.9 per cent registered in June pushed average UK prices to £168,941, marking the strongest year-on-year uplift seen since September 2010.
However, the rise was less strong in the West Midlands, at 0.8 per cent.
Meanwhile, house prices have risen in all parts of the region in the past quarter, aside from Warwickshire, where there has been a three per cent fall, and Worcestershire, where there has been no rise.
Mr Evans believes the market is now ripe for a developer to launch a new city centre residential development.
He said: “There is a good market in Birmingham at the moment as the reality is there is an under-supply of products. We have had this perception that there is an over-supply of apartments after 2007 to 2008 but as nothing has happened since 2008, demand is quite high at the moment, and yet there is very little coming through the system.
“At the peak in 2003 to 2004 we sold about 1,500 homes in and around Birmingham city centre. Today we are doing something between 200 and 300.”
Gerard Smith, a partner specialising in country homes and auctions at estate agents Andrew Grant, said: “The major price rise discrepancies were down to things like the Calthorpe Estates and the new apartments in the Jewellery Quarter that were built up before and then crashed back down.
“The rest of the stock, that was quite humble, in suburban areas, didn’t suffer as much as the glitzy properties.
“There were so many apartments built in the city centre that there wasn’t enough demand.
“Meanwhile, Coventry has benefited from what I call the North Solihull factor – people who find themselves unable to afford Solihull end up in the Coventry area for value-for-money.”
Average house prices around the Midlands
- Birmingham - £168,590
- Coventry - £165,120
- Greater B'ham - £165,588
- Herefordshire - £181,325
- Shropshire - £171,175
- Staffordshire - £157,000
- Warwickshire - £196,939
- Worcestershire - £188,956