House prices in the West Midlands have stabilised after cooling more rapidly than other parts of the UK, it has been claimed.
The average price of a property in the region rose by 0.8 per cent to £149,200 last y ear, compared with a national 3.2 per cent increase to £158,745.
This reflected a local jump in property values of £3 a day, compared with £14 in the rest of the country, according to figures released by Nation-wide building society.
During the fourth quarter house prices in the West Midlands remained static as interest rates and doubts about employment prospects began to have an influence.
Fionnuala Earley, group economist at Nationwide, said: "The final quarter of 2005 saw prices in the region stabilise after falling by 0.9 per cent in the previous quarter."
The average price of a house in the West Midlands is now £1,230 more than a year ago.
House price inflation in the region followed the same pattern as the United Kingdom average in 2005 until the final two quarters when the market cooled more rapidly, said Nationwide.
The slowdown was part of a realignment in property values after the region experienced a peak of house price inflation of 30.1 per cent in 2002, higher than the 26 per cent ceiling in the rest of the country.
It helped contribute to greater affordability in the West Midlands.
Mortgage payments as a proportion of take home pay slipped from 49 per cent to 47 per cent, compared with a national average of 48 per cent.
This meant that affordability had returned to levels last seen in 1991, Ms Earley said.
Within the West Midlands, Worcestershire was the most expensive area to live, with prices nine per cent above the national average.
The average price of a property in the county is now £181,563, after rising by 4.1 per cent during the year.
Prices in Coventry outpaced the regional average, with a 4.7 per cent increase in average prices to £161,044.
Prices fell in Herefordshire by 1.9 per cent to £170,764, while Birmingham also saw a slight dip with values adrift 0.3 per cent to £166,044.
Within the sub regions, the local authority area with the highest price increase was Wyre Forest in Worcester-shire, which saw prices surge by 23.4 per cent, the only local authority with a double digit price increase.
In contrast, prices in North Warwickshire fell by more than 14 per cent and those in Solihull by ten cent during the year.
Ms Early said she expected the West Midlands housing market to perform less well than the UK, with a range of a one per cent rise to a two per cent drop anticipated.
She said: "Overall we expect prices in the West Midlands to perform less well than the UK average primarily because of the weaker labour market in the region.
"The West Midlands has seen employment deteriorate more quickly than the UK average and this will put a strain on the local housing market moving forward.
"While affordability has improved, like most of the UK, it remains stretched."
