West Midland house prices will trail many other UK regions in their recovery from the current downturn, but will bounce back ahead of the North East and North West, according to a new report.
House prices are not expected to return to their 2007 level in the West Midlands until 2014, according to estate agents Savills.
Savills’ predictions put the region behind London, the South East and Scotland, which are likely to return to their 2007 levels by 2012, followed by the South West, the East and the East Midlands, said Savills.
But the West Midlands will bounce back ahead of Wales, Yorkshire and Humberside and the North West, which will take until 2015 to recover.
The North East and Northern Ireland are not set to recoup house price falls until 2016, according the estate agent. But Richard Franklin, RICS spokesperson and divisional development director of Persimmon Homes is more optimistic for the West Midland housing market.
“If anything the figures could be pessimistic in terms of recovery.
“Savills predict the West Midland market coming back in 2014 - effectively two years behind the South East and London.
“I think it could be 12 months before that.”
Mr Franklin pointed to the unique nature of the London housing market, which makes comparisons to the rest of the country difficult.
“The London market tends to operate in a sphere of its own - it’s an international housing market.
“It’s difficult to relate it to the rest of the regions in the UK and it’s more constructive to relate to how it compares, for example with the North East, who’ll have pain for two years longer.
“I think that’s due to the nature of the housing stock in the Midlands – we’ve got a good varied stock.
“If you take the North West, for example, there is lots of more traditional terraced housing which is coming to the end of its natural life.”
Savills said property transactions were currently running at half of last year’s level, while the number of new homes being built is expected to continue to fall.
As a result, it said supply was likely to become constrained in many markets over the coming months, leading to sharp price increases in certain areas of the country once demand picked up.
Mr Franklin said the housing market recovery in the West Midlands is likely to follow this pattern, especially for new homes.
“Housebuilders have effectively turned the tap off, but there is still a strong underlying demand still remaining.
“If the lending climate alters, with strong underlying demand and as long as the unemployment situation doesn’t get any worse, the market will come back.
“It’s not as if people suddenly don’t want to buy or move house - housing is a need and you can only defer buying for so long.
“A lot of commentators did not foresee the rapidity of the slowdown, but if money is freed up and with underlying demand, it could potentially recover as swiftly.”
“If housebuilders aren’t building new homes, and a lot of people want the benefits of a new home, there’s going to be a limited pool .
“These could come back significantly swifter than poorer older stock.”