An estate agent specialising in city centre living has closed its Birmingham office, saying there was not enough activity in the area's housing market.

Stirling Ackroyd, which previously operated out of offices on Paradise Circus Queensway, has stopped taking on work and will be closing formally on April 7.

In a letter to one Birmingham homeowner who had contacted them looking to sell his home, the company said: "Unfortunately the Birmingham city centre market is not currently active enough for us to do it justice."

And it added: "We must acknowledge the laws of economics defy no-one."

In recent months housing has come under more and more pressure as global markets tighten in the wake of the global credit crunch.

But one property group said there was still plenty of scope for success in the Birmingham city living buy-to-let market - as long as investors kept a careful eye on what they were buying.

Perm Saini, co-founder of the Edgbaston-based Claremont Group, said Stirling Ackroyd’s focus on reselling homes instead of catering for the buy-to-let market had let them down in Birmingham.

Claremont bought 140 of the 232 flats in the refurbished Rotunda for investors. Ms Saini said: "Stirling Ackroyd never really got their head round Birmingham. They are a London-based company, they came up here planning just to do a few developments and ended up picking up a lot of the other developments.

"The resale market across the country since the Northern Rock business has been hit because people are concerned about property values.

"But I think the Birmingham market still holds its own. What people have to be conscious of is the ’fear factor’."

She said that the constant reports of the effects of the credit crisis had made people reluctant to invest in quality property.

But this in turn meant there were more people looking to rent, creating opportunities for people in the buy-to-let market, if they made sure their investments were sound.

"There are a lot of opportunities in Birmingham now because it’s a buyers’ market. There will be some really great properties selling for below market value.

"And the market for renting is looking great, we are getting enquiries all the time."

But the speed of development in Birmingham city centre - largely driven by people buying flats in apartment blocks before they were built - was likely to be slowed as people became more cautious over the coming months and years.

Stirling Ackroyd confirmed its Birmingham office was set to close, but could not put anyone up for comment.