Property prices in the West Midlands have returned to pre-credit crunch levels indicating the recovery could be in full swing.
Values have now risen above 2007 when the financial downturn started – soaring to £180,241 for an average home in the region.
Values in March continued to climb, according to Office for National Statistics (ONS) data, with the prices in the region recovering to outstrip levels reached before the financial crash.
Year-on-year March values have risen from £175,516 – underlining the sector’s solid, but unspectacular growth of 0.1 per cent regionally during the month since the end of February.
The national rise of 0.4 per cent during March is the first increase reported this year.
Confidence has been slowly returning to the UK housing market since the summer of 2011 and transaction levels have been consistently high for three consecutive months,
On average, the West Midlands has reported the biggest increase in homes sold since the start of the year, followed by vendors in the London area.
National figures showed that in the 12 months to March, UK house prices increased by 2.7 per cent, up from a 1.9 per cent increase in the year to February.
The ONS figures showed that average house prices rose in England and Wales by three per cent and 1.2 per cent respectively over the year to March. London and the South East continue to drive the rises, with prices up annually by 7.6 per cent and 3.3 per cent respectively in these regions.
However, economists said that although the house price changes suggested that there would be a moderate rise in prices over 2013, there could still be problems for the economy.
Howard Archer, chief UK and European economist at IHS Global Insight, forecast that a moderate increase in house prices over the whole of 2013 is looking “increasingly probable.”
He continued: “There is concern that the Help to Buy mortgage guarantee scheme could eventually fuel a housing price bubble, but we suspect that is unlikely in the near term given still modest looking growth prospects.
“However, it is something that policymakers will need to keep a very close eye on further out and they must be prepared to quickly pull the scheme at the first sign of any housing price bubble developing.”
Mortgage lenders have also reported one of their strongest months since 2007 in a further sign that government efforts are prompting an upturn in the housing market.
Because the ONS compiles its house price statistics at the point at which mortgages are completed, its evidence on prices tends to lag the market. Figures published this week by Rightmove showed that house prices nationally were up 10 per cent in five months – mostly driven by rocketing values in London.
The Council of Mortgage Lenders (CML) estimated that £12.1 billion worth of loans were advanced in April, marking an increase of one fifth year-on-year.
The number of mortgages on the market has increased sharply and lenders have slashed their rates since a government scheme called Funding for Lending was introduced last August.
Katie Teasdale, of Birmingham Chamber of Commerce, said the economy was showing improvement.
She said: “It is in a much stronger place than it was and this is underlined by better news from the manufacturing and service sectors.”