With the number of property transactions at half of last year’s and housing starts likely to drop even further, where does the canny investor put his cash?

According to a new recovery map drawn up by Savills’ research department, London and the south east look set to lead the recovery that will quickly return to former levels by 2012.

Other key findings by Savills include:

* Between 2008 and 2020, average growth in the south east will be 79%.
* Scotland will recover by 2012 with growth between 2008 and 2020 averaging 47%.
* On the flip side, Northern Ireland and the north east are not expected to recover until 2016 with average growth between 2008 and 2020 at 33% and 19% respectively.

‘The property market has affected virtually all property sectors and UK regions simultaneously, but regions will vary far more when the upturn comes,’ says Yolande Barnes, head of Savills’ residential research.

‘The lack of turnover and new supply, which is such a feature of this downturn, will be likely to lead to sharp increases in value in high demand, low supply areas. Competition among homeowners will once again lead to rising prices, particularly in those areas with higher levels of housing market equity and stronger household purchasing power such as London, the south east and Scotland,’ she adds.

Although the downturn is severe and will almost certainly last for at least another year, it has been caused by the withdrawal of credit, not the withdrawal of long term demand or diminished purchasing power from owner/occupiers, points out Mrs Barnes.

The credit crisis has affected all sectors and regions more or less equally and simultaneously, but we will witness a very different pattern when a recovery takes place in the property market. Canny investors will take this into account now, the report stresses.