House prices have fallen by less in the West Midlands than across the UK generally so far this year – but the region’s homeowners are distinctly more nervous about what the future holds than people elsewhere.
Nationwide surprised economists yesterday by reporting a 0.9 per cent bounce in UK house prices between February and March, but its quarterly survey showed big variations between regions, in which the West Midlands featured among the most resilient.
The price of the average West Midlands home fell by 3.9 per cent to £136,166 in the first three months of this year, 15.3 per cent down on the first quarter of 2008. That compares with losses across the UK of 4.2 per cent in the quarter and 16.5 per cent year on year.
But 55 per cent of West Midlanders expect further falls in the next six months, more than in any other region except the East Midlands and London. The UK average expecting the slide in house prices to continue is 52 per cent.
House prices have fallen by 16 per cent in Coventry over the past year, more than in any other part of the West Midlands. They are also the cheapest, averaging £141,039.
Herefordshire has the region’s most expensive homes with an average of £180,109. Their prices have also held up best, falling only seven per cent from the first quarter of last year.
Worcestershire is in second place with an average of £175.164 but that is after an annual fall of 13 per cent.
The trend in Warwickshire is very similar. Prices there are down 14 per cent to £171,742.
In Birmingham itself a 12 per cent loss over the year has lowered the average to £155,597.
The UK increase in Nationwide’s house price index for the single month of March was the first since October, 2007 and took the national average to £159,946, down 15.7 per cent on March last year.
“While the rise in prices in March is welcome, it is far too soon to see this as evidence that the trough of the market has been reached,” said Nationwide’s chief economist, Fionnuala Earley.
“The Bank of England has already taken strong measures to ease the tensions in economic and financial markets by cutting rates and commencing quantitative easing.
“However, it will take time for these to work through into the housing market before we can expect to see a sustained recovery in house prices,” she added.
The rival Halifax measure of house prices showed an even more unexpected jump of 1.9 per cent in January, only to see it more than wiped out in February. Halifax has still to publish its index for March.
Ms Earley pointed to signs that activity in the housing market may be stabilising at a historically low levels.
The number of mortgages approved rose to 37,900 in February, well short of the long-term average of 94,000, but still ahead of the 32,000 a month recorded in the second half of last year.
“The upturn is welcome,” she said, “and is certainly a signal that there is some movement in the market.”
The estate agents’ sales-to-stock ratio had begun to stabilise although it remained very low and house price expectations were very weak.
“The upturn in activity is therefore more likely to reflect the return of buyers who have delayed purchasing through the worst of the financial turbulence at the end of 2008, rather than the beginnings of a swift recovery.
“Nevertheless, the willingness of borrowers to return to the market is encouraging and likely to in part reflect the falling cost of borrowing.”