Agent says Brum council collapse ‘won’t crash the city’s housing market’
Barrows and Forrester says council's bankrupcy is unlikely to dent a housing market that has performed strongly over the last year.
The implosion of of Birmingham City Council will wreak havoc across the local area with all ‘unessential’ services mothballed but the housing market is likely to remain unharmed, research from Barrows and Forrester reveals.
Last week Birmingham City Council (main picture) declared that it was effectively bankrupt and it’s thought that 20 other councils could be at risk of following in the path of Britain’s second city and spelling misery for thousands.
PRICES INCREASED
But analysis of house prices across five councils to have previously declared effective bankruptcy – Northamptonshire Council, Hackney Council, Thurrock Council, Croydon Council and Slough Council – show prices increased at an average rate of 3.2% in the year that followed.
Hackney saw the strongest performance with house prices climbing 13.6% in the 12 months following its October 2000 declaration.
A year after Slough Council did the same in July 2021 house prices increased by 8.7%, with Northamptonshire house prices seeing a 2.3% increase a year after its council declaring effective bankruptcy in February 2018.
But a year on from Thurrock Council’s declaration house prices in the area had fallen by -4%, with Croydon house prices following suit at the end of last year (November 2022), falling by -4.5%.
HIGH DEMAND
James Forrester, Managing Director of Barrows and Forrester, says: “Birmingham has been going from strength to strength in recent years.
“As a result, we’ve seen high levels of demand for housing and an above average level of house price growth over the last year alone.
“The bad news is that cuts will be made and this is likely to impact some local services, infrastructures and the city as a whole. This could reduce property market demand – especially from working professionals.
“The good news is that the Birmingham property market has weathered far worse in recent times, from Brexit to the pandemic and the current economic landscape. Our research shows that effective council bankruptcy has little to no effect on the residential market.”
