NOTTINGHAMSHIRE'S hard-pressed homes market looks likely to pick up during the next year, industry experts say.

A market that has been in the doldrums for more than a year should see property prices bottom out during 2009, with buyers returning from spring onwards.

Lucian Cook, research director at estate agents Savills, says he expects to see property prices rising again from 2010 onwards, with a steep rise from 2011.

While the city of Nottingham's property mix means it will take longer to recover, Nottinghamshire as a whole is likely to be part of an East Midlands revival that may precede other parts of the country.

Savills' research shows that the price of the average property in the UK peaked at £182,000 in December last year. Its forecasts suggest that the market will have bottomed out by the end of next year with an average price of £136,000.

But it says prices will be back up to around £150,000 within two years and accelerate back up to the peak.

The steepest falls have already taken place, and Mr Cook says he expects buyers to re-enter the market in spring, buying up good properties before the market reaches the bottom in the knowledge that their home will be worth more within two years.

The housing market's growth will be driven by demand among buyers and the fact that

affordability ratios – the relationship between property prices and buyers' ability to pay – are now much more favourable because of price falls.

"In the late 1980s affordability was running at something like minus 30%," said Mr Cook. "It is now running at around plus 20%.

"The difficult at the moment is not demand or affordability – it is the fact that the mortgage market is constrained. The market has almost over-corrected because of that."

During previous economic slowdowns, property transactions have fallen by as much as 20%. This time, they have dropped by 60% since the autumn of 2007.

Mr Cook says some buyers are "sitting out" the market downturn having sold their property and moved into a rented home.

He says buyers in the strongest position are those able to put more cash into their purchase, with the proportion of cash buyers expected to reach 40%, compared to 25% in normal market conditions.

Chris Charlton, of Savills' Nottingham office, said sellers would have to adopt a hard-headed approach to price to help their property find a buyer.

"This is happening, but it's a slow process because it takes time before reality hits home," he said.

"If you are going to sell then to a certain extent you need to be ahead of the curve on price. People may be prepared to buy now even though we are not at the bottom of the market because there is no competition.

"Towards the end of next year, though, their may be a dearth of attractive properties because most of the good ones may already have been bought."

Mr Cook says that when prices do begin to rise again they may do so quickly.

"The recovery will probably take place more quickly because affordability will be re-established much more quickly than it was, partly because of improved mortgage interest rates.

"There was a four or five-year lag in the property market the 1990s because of higher inflation and interest rates. That is not the case this time."

He added: "The East Midlands is in a relatively healthy position. It has traditionally bounced back quicker than the West Midlands because of factors like population pressures and the economic outlook."

Chris Charlton added: "While Nottingham city itself may take a little longer to recover because of the nature of its property market, we expect that Nottinghamshire will pick up in line with the rest of the East Midlands"

Mr Cook said traditional family properties would probably be in the highest demand.

He said: "The new build flat market is clearly over-supplied. The big shortage going forwards is going to be in good quality family houses. That is where you will see the strongest growth."