The road to prosperity

Only now are the effects of the M40 being felt in the west Midlands market. Prices in the area between Banbury and Warwick have risen over the past year to match those of the late Eighties, when pre-motorway hype reached a peak. But by the time the M40 opened in 1991, the recession was biting hard and house prices in prime spots fell by 40 per cent over four years.

Ian McConnel, of Savills' Banbury office, has seen the market improve enormously in the last year - a delayed reaction to the M40, as he puts it. Country house prices south of Birmingham have seen the same sort of increases as those in the South-east - in the region of 10 to 15 per cent. Here, and in the Cotswolds, London money is pushing up prices. For an undiscovered area that offers value for money and good access to London, Ian McConnel suggests looking between Northampton and Coventry. Cala Homes, one of the developers in this region, has seen sales take off since Christmas. Towns such as Malvern and pretty villages such as Henley- in-Arden - where the company is building in the centre - have seen enormous interest. The more conservative Midlands market has been slower to warm, though, to its award-winning Californian-type houses near Birmingham.

The inward migration of people and business that the West Midlands is seeing is also being felt in other areas where the motorway network has been extended. Large railheads are being built to speed up distribution and as companies move in, certain towns will begin to see new development. Quentin Jackson-Stops, of Jackson-Stops & Staff, gives Kettering in the east Midlands as an example of a town seeing the benefits of the A14 which extends the M6 eastwards to join up with the M1 and on to the ports. It has also affected prices in villages close to the new road. An old rectory in Catworth sold quickly and for more than the asking price because it is only a mile-and-a-half away. "New roads bring about a levelling out of values. Of course, they can also become victims of a road's success."

Keith McEwan, chairman of the northern division of David Wilson Homes, sees a keen interest in new homes in the market towns around Leicester. "A first-time buyer can find a three-bedroomed semi-detached house in north-west Leicestershire in the low pounds 40,000s, whereas close to Leicester city it would be in the mid-pounds 50,000s. Also, the company's conversion of an old hospital, St James Park, near Radcliffe-on-Trent, is popular as it has mixed housing scattered throughout 90 acres of grounds. All city centre developments are in very short supply, and as more people choose to move closer to their work, the houses get snapped up quickly. Crosby Homes has sold almost all its 143 homes at Symphony Court in the heart of Birmingham. Some 40 per cent have gone to doctors and lawyers."

The latest figures from the Halifax show that in the final quarter of 1996, the West Midlands saw increases of 3.5 per cent, second only to Greater London, whereas the East Midlands, at 1 per cent, were among the lowest increases.