Midlands property prices fail to recover
07-06-2014
House prices in parts of the West Midlands are lower now than at the worst point in the recession, despite a national upturn in the market.
One in five believe they may have to leave their local area due to high housing costs, a poll shows
Fears of a two-tier recovery were raised today as average houses in areas like Bilston were shown to have dropped thousands of pounds in value since 2009 while a home in affluent Solihull has shot up by more than £52,000.
It ranks 57th in the country out of 295 areas for price changes.
A home in Stafford is also worth on average nearly £18,000 more now than during the recession.
Areas like Wolverhampton have seen a small uplift in value since 2009 but a sudden increase in the past year according to Halifax.
Yet homes in Walsall, Stourbridge, Kidderminster, Dudley, Willenhall and Cannock are all being sold for less now than five years ago.
It will raise concerns for families looking to move to a bigger home as they may not be able to use the sale of their existing property to give them a suitable deposit.
In London prices have soared with wealthy investors heading for the capital.
According to figures released by Halifax a single square metre of property in London’s Lambeth borough is worth £1,928 more than it was in 2009.
But in Cannock the value per square metre has dropped £110, or seven per cent.
In Bilston an average home will change hands for £107,008, which is £4,000 less than anyone buying it in 2009 would have paid, compared with £268,042 in Solihull, where a buyer would have paid £212,904 five years ago.
Shadow housing minister Emma Reynolds, MP for Wolverhampton North East, said: “There are different housing markets in different parts of the country.
“The government claims the housing recovery is on track but the governor of the Bank of England says the biggest threat to the recovery is the housing market because of a shortage of supply.
“The figures tell that there is a different story in places like Cannock, Bilston and Dudley to areas like Solihull.
“In many parts of the West Midlands house prices have not recovered to pre-recession levels while in London and the south east they are way above.
“There are hugely different markets and that’s really worrying for people who bought their homes prior to 2009 in areas where the market has not recovered.
“Someone who bought in 2007, before the recession, will find that in some areas there home is worth less than they paid and that’s going to be a real concern for them if they want to move.”
Craig McKinlay, mortgages director at Halifax, said: “House price per square metre is a useful measure for house price comparison because it helps to adjust for differences in the size and type of properties between locations.
“While there are areas in central London that are more expensive than anywhere else in the country, there are notable pockets outside the South East where property also has a high price per square metre.
“Many of those areas experiencing the strongest increases over the past few years are those with the highest price per square metre.”
Despite the low growth in prices, four out of five properties on the market are out of reach of the average working family looking to buy their first home, according to the housing charity Shelter. Even if people can save up for the deposit – around £26,000 on a £148,000 home – research said that many can’t afford the monthly repayments which would be needed. The charity looked at asking prices for thousands of properties for sale in the West Midlands on a given day and compared them with the mortgage that families, couples and single people on average wages could afford as first time buyers.
Out of 33,000 homes on the market across the region, fewer than 7,500 were considered affordable.