Spring Property Survey: Rural backwater leads charge: In East Anglia, the boom area of the 1980s, estate agents are optimistic and the market is moving again, writes David Lawson

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The Independent Online
IF ONE region tells the story of the 1980s it must be East Anglia. This rural backwater, ignored by every boom since the agricultural revolution, grabbed the headlines as property prices exploded. Now it promises to lead the charge into the 1990s, although the pace will be less frenetic.

Everything was going right for the region until national economic problems fell like a wet blanket on to a raging fire. Londoners whose homes had turned into money factories had been leaving the choked city flush with cash to buy a dream. They scrambled for thatched Suffolk cottages, Cambridgeshire rectories and windswept holiday homes in deepest Norfolk. House prices soared faster than anywhere in Britain, more than doubling in the five years to 1990.

Then came the slump, and as the highest flier, East Anglia had a long way to fall. Yet the strength of its drawing power meant the number of homes sold in the region increased as recently as 1991, when most other parts of Britain had collapsed. But last year prices fell more than 8.5 per cent, according to the Halifax Building Society - almost 3.5 per cent in the three months to Christmas alone.

This is not much worse than some other regions, however, and a lot better than London and the rest of the South, where cuts reached double figures. Unemployment, which has held back buyers right across the country, remains much lower in East Anglia than anywhere in the UK. Hi-tech factories and office blocks which sprouted like weeds before the recession have not been hit as severely.

That has helped spark early signs of recovery following cuts in interest rates. 'Things are better than we dared hope,' says Mark Stewart of Bidwells in Norwich. 'We exchanged on four times as many properties in January as the same time last year and viewing figures were up 96 per cent.'

His colleague in Ipswich, Guy Jenkinson, says the comeback has not faded. There were even cases of more than one buyer bidding for the same property - normally a sure sign of a rising market. But there are many different views about the recovery - and even a fear that it may not last.

More than half the sales seen by David Richardson of Hockleys in Cambridge were at more than pounds 60,000 - chiefly because repossessions were drying up and that meant buyers were releasing sellers to move up-market, he says. Yet agents William H Brown at Fakenham in Norfolk report so much interest among first-buyers at less than pounds 40,000 that most houses in this range have been sold.

Michael Simpson, of Framlington in Suffolk, has a similar message. 'There has been a lot of activity but the only sign of real improvement seems to be at the bottom end,' he told last month's survey by the Royal Institution of Chartered Surveyors. Cottages and first homes at this level go for around pounds 30,000.

On the other hand, another leading local agent is celebrating a surge in buyers for higher-priced homes. 'We have agreed sales totalling a phenomenal pounds 6.5m in the last six weeks, including some of the most notable properties in the area,' says Jock Lloyd-Jones of Bidwells in Cambridge. He puts that down to a traditional link with buyers from central London, who are buoyed by low interest rates and the high stock market, plus increasing interest from foreign buyers attracted by a weak pound.

This tie-up with London is one key to East Anglia's bright future. Despite the huge price increases of the 1980s, an average house costs just over pounds 60,000 compared with more than pounds 86,000 in the capital. The gulf is even bigger for a semi, which rates less than half London's average of pounds 103,000, according to the Halifax. Low unemployment plus a far better quality of life will also suck buyers out of the city. 'In the long term to 2005, East Anglia will be the fastest growing region of the UK in terms of population, output and employment,' says Cambridge Econometrics, the leading forecaster. That will regenerate the property market much faster than in other areas.

London workers are already reviving their interest now that homes are easier to sell. 'The last three months has seen the return of the commuter after a dearth of about two years - another possible sign of returning confidence,' says Mr Lloyd-Jones. Some are even willing to spend two hours each morning travelling in from Norfolk, says Malcolm Duffey of Jackson Stops in Newmarket. They can buy a classic five-bedroom country house in five acres for less than pounds 200,000 - which is a good pounds 50,000 less than in more accessible Suffolk.

That depends on finding a house to buy, however. 'New instructions, particularly at the top end of the market, have fallen,' says Mr Jenkinson. He blames sellers for anticipating better prices and holding back their property until later in the year.

They could be disappointed. Even the most optimistic agents are not expecting East Anglia to return to overdrive this year. In fact most warn not to expect any rise over the coming months. 'Unemployment fears remain a real obstacle in the minds of many,' says Mr Richardson.

Like the rest of Britain, East Anglia will have to struggle out of the pit of recession. But it should have an easier climb than most, and prospects look good for a long jog into prosperity.

(Photograph omitted)