Will the west escape the credit crunch?

The South West and South Wales may be best placed to withstand the credit crunch, according to a new survey by Knight Frank.

The estate agents said that the western region is well placed to withstand current economic uncertainties, with a forecast of a fall in house prices of 1 per cent this year compared to a fall 3 per cent predicted for the rest of the UK.

Liam Bailey, head of residential research, Knight Frank said: “While the global economic downturn witnessed in the second half of 2007 has had an impact on all UK residential markets, dampening capital growth forecasts, the western region’s housing market relies on a diverse set of market drivers.

These include lifestyle motivated relocations, those looking to downsize their property, a vibrant second home market and an expanding student population. The last of these has also contributed to an expanding private-rented sector.

The region is also benefiting from an enlightened series of development programmes that has seen a focus placed on the regeneration of city and town centres and the reuse of abandoned public sector land. One particular trend worth noting is the way in which retail and residential projects are being delivered in tandem through large mixed-use developments.”

In South Wales, Knight Frank said it expects Newport’s redevelopment plans to dominate future growth, while the regeneration of Swansea city centre will help that city.

In the South West, particularly, Somerset, Dorset, Devon and Cornwall, strong demand for new-build detached family homes will mean this sub-market will outperform the market average.

Additionally, the relocation of public sector services, such as The Environment Agency, The Met Office, The Ministry of Defence, Child Support Agency and the Land Registry to the South West has added region’s employment prospects.