Where has the property crash hit hardest?

We scoured the land to find where the property crash has hit hardest and came across some declines of up to 50%. Patrick Collinson and Miles Brignall report

Just how bad is the property market right now? Are desperate sellers slicing thousands off asking prices to shift their homes? Do the national average figures disguise massive variations on a street-by-street level? Or are homeowners refusing to budge on price and hoping that the downturn will prove short-lived?

Guardian Money this week went searching the length and breadth of Britain to find which areas have been hit by the steepest price falls.

Sure enough, we found some properties where asking prices are now about 50% below the prices paid as little as two years ago. But we also found that price falls are concentrated in certain property types - new-build flats are worst hit, family homes much less so - and found some towns (step forward Hartlepool) that the property crash appears to have bypassed.

We were guided in our research by a website that has become hugely popular among property professionals: propertysnake.co.uk. This records the listing price of properties registered on the big estate agency websites, then identifies when and by how much this drops in following weeks. However, it does not claim to be 100% accurate, because some property agents have blocked access to their listings.

Its home page informs you that there are plenty of properties around the country where the asking price alone is down by between 40% and 50%. Still, that may merely tell you vendors were being hopelessly optimistic when they put their home on the market in the first place.

Where we could, we compared today's selling prices with the prices last achieved, using Land Registry data - now free to see on thinkproperty.com and nethouseprices.com.

Major house price data providers were keen to issue press releases identifying hotspots when the market was bubbling, but are less comfortable about identifying today's cold spots.

But Nationwide, to its credit, has named the towns and cities which it says are seeing the biggest overall price falls. At the end of October, it claimed that Belfast was dropping fastest, with average prices down 26% over the year. In England, it named Sheffield (-19%), Bristol (-14%), Cambridge (-14%) and Liverpool (-13%) the worst casualties.

But Land Registry data gives a slightly different picture. Its latest statistics, for September, show Merthyr Tydfil in south Wales was the worst-performing district, down 4% on the month alone, while Conwy, in north Wales, was bottom of the pile over the year, down 10.6% (and, curiously, significantly less than the figures recorded by the big lenders).

Our research found south Wales was the area in which there was no difficulty finding properties for sale at hugely reduced prices. And prices remain highest, and firmest, in London.

Despite the ongoing financial crisis centred around the City, Land Registry figures suggest it is only slowly radiating through the local property market. Some boroughs, such as Hackney and Southwark, are still recording year-on-year price rises, although most are now registering month-on-month declines, with Croydon leading the way down.

Henry Pryor, a specialist in tracking house price data, says that around one in 10 properties in Britain is showing a "revised price".

"Many homeowners thought their property was somehow different from all the others when they put it on the market and that they could ask more. Whilst some agents, and a lot more lenders, were still in denial at the start of the year, it was clear to most that the good times were over," he says.

"The number of homes that were selling each month fell by 25% at the start of 2008, and 50% by the end of the summer, and still we could see examples of properties being marketed at crazy prices. Many are now having to reduce their asking price to attract interest. In a falling market, you have to price ahead of the curve.

"There are still more than 850,000 individual properties for sale in the UK but, with fewer than 7% selling each month, there is huge competition to get the few committed buyers.

"These buyers appreciate that they are in the driving seat which is why many employ a buying agent who can negotiate the very best deal."

Cardiff
Galleon Way

Peak price £234,500
On sale now £116,950

The Cardiff bay area is Europe's largest waterfront development and a symbol of the economic renaissance of Wales, housing the National Assembly and the Millennium Centre. In April approval was given for Bay Pointe, which at 120 metres will incorporate Wales's tallest building and 1,800 apartments.

But local property experts say up to half the apartments around the bay may now be unoccupied, and prices are plummeting. In private, one of Britain's biggest mortgage lenders told Guardian Money the bay is where it is seeing the heaviest price falls.

Galleon Way is a gated development of "executive" apartments with loft-like spaces, en-suite bathrooms and views across the Bristol Channel. But it is riddled with repossessions. Local estate agent Darlows says that it alone has taken on to its books eight repossessed properties there.

When the development went on sale, people were "fighting to get in and queueing up to buy", says agent Amanda Trinder. Some sold for £300,000, though the average was nearer £200,000. But now, Trinder says, the only buyers to be found are cash-only bargain hunters looking for repossessions at knock-down prices.

The property 138 Galleon Way first went on the market at £159,950 in July. But propertysnake.co.uk reveals that the asking price has been progressively cut to £149,000, £129,000 and £117,000. The apartment next door sold for £234,500 in June 2007.

Peak price buyers are in severe negative equity and Galleon Way is not unique - Trinder says the price falls are typical of the bay area.

Chatham
The Eye, Chatham Maritime

Sold May 2005 £219,950
On sale now £140,000

It's the south-east's flagship regeneration project, an award-winning transformation of a historic dockyard into a thriving business and residential community. But in some parts of the area, apartment prices are falling steeply. The Eye is a luxury apartment complex built between 2004 and 2005 where flat 36 fetched £219,950 - one of the highest prices in the block. No doubt its buyer was attracted by "panoramic views across the river Medway", a huge open-plan living area and two large bedrooms. Naturally, it has two bathrooms as well and secure video entry.

But those fancy prices have not been seen for some time. The latest sale in the block fetched just £155,000, and when agents Spicer McColl put this property up for sale (it's a repossession), it initially hoped for £160,000. But as propertysnake.co.uk reveals, that was at the beginning of January, and there were no takers. In July the price was cut to £150,000 and then in October it dropped to £140,000.

There is a silver lining for residents who bought at the peak: Spicer McColl says the monthly management fees, which were around £1,600 a year, are being negotiated downwards.
Patrick Collinson

Nottingham
The Habitat

Sold 2005 £140,000
On sale now £90,000

Some poor soul probably spent their life savings on this two-bed apartment in 2005 in what was then considered to be the up and coming city centre of Nottingham.

Today that same flat in the trendy Habitat building has been repossessed by the mortgage lender and is on the market for a shade under £99,500, and can be had for less.

Along with a number of other cities, Nottingham has seen an explosion in city centre new-build flats. Buy-to-let investors targeted the city, lured by cheapish prices and a large student population. Unfortunately for them, property prices have remained flat since 2005, and are now falling fast.

When this flat was put on the market back in March the bank was asking £127,500; today the agent has it on at £99,950. But our inquiries suggest that a cash offer close to £90,000 would probably get you the keys right now. That would represent a loss of value of 36% - much of it borne by the original buyer who has lost whatever deposit they put down. The lender has lost the rest. Given the way the market is going it may be worth offering £80,000 - after all, it has been on the market for eight months.

A negotiator at Richard Watkinson Partners, the agent selling the flat which is just off the city's famous Lace Market, described the market as "tough" but said realistically priced properties are selling. "There's no doubt it's a buyers' market but if you are prepared to price your property to sell, it will happen. Too few vendors seem prepared to accept that their houses are not worth what they were a year ago, and are holding out for prices which they will never get in the current market."

Leeds
Morris Lane

Originally on sale at £375,000
Now asking £199,950

In the past, properties like this seven-bedroom house in the Kirkstall area of Leeds would have prompted a bidding war among local builders, but not any more.

This huge family house is in complete need of refurbishment and in the past would have been quickly turned into three self-contained flats. But to undertake such a project you need ready access to cash, something that is in rather short supply at the moment.

According to the local agent marketing the property, Mannings Stanton, the house has sold three times but in each case the survey has turned up problems that had to be rectified. The cost of the structural repairs was put at around £105,000 - enough to put off private buyers - but in the past it would have been snapped up by a builder. "The family that own it have moved out and have said they won't go below the asking price," the agent says rather hopefully.

"They originally had it on the market at £375,000 and they take the view that they lived there for years without a problem, so why shouldn't someone else."

The property has been on the market for at least 262 days according to propertysnake.co.uk. Expect it to stay there a bit longer in the current climate.

Overall, the agent describes the Leeds market as quiet. "While things have slowed dramatically they are still selling at the right price."

Belfast
Orkney Street, Shankhill

For sale January £129,950
For sale now £69,950

If you want to see what happens when a property bubble is truly pricked, take a trip to Northern Ireland.

During the post-troubles boom of 2006-7, house prices in the province rose faster than in any other part of the UK, in many cases by as much as 50%.

Two years on, however, it's all looking very different. Buy-to-let investors who poured in from the UK and Eire have watched in horror in as prices have fallen back to where they were before the "peace dividend".

Those who bought at the bubble's height will be nursing serious losses.

Nationwide recently put the region's annual price collapse at over 30%, while local estate agents say prices have fallen 40%-plus and further losses are still feeding through.

Almost every location and every type of home finds itself in the doldrums.

A Bank of Ireland survey shows that Lisburn, Armagh, South Tyrone and Enniskillen are some the worst.

It's a similar story in Belfast. This two-bed terrace in Shankhill is typical of many homes in the area.

In the 10 months that it has been on the market, the owner has almost halved the asking price, and is no closer to selling. According to Ulster Property Services, the agents marketing the house, Orkney Street is a "much improving" area. It says the home has been the subject of "substantial upgrading".

When we ring up posing as a potential buy-to-let investor, the negotiator at Ulster gives it to us straight. "If you are ringing from the mainland you should know that there's been at least a 20% to 40% fall in the price of everything around here.

The owner is prepared to be realistic," she says leaving you to conclude there's a further £5,000 to £10,000 saving to be made on the offer price.

Upmarket estate agency Knight Frank suggests it will take until 2019 for Northern Ireland's house prices to return to 2007 levels; Savills is slightly less pessimistic, suggesting 2016.

And the towns that buck the trend...

It isn't all bad news across the country. Some parts are still enjoying price rises, according to figures from the Land Registry. Leading the way is Hartlepool, where average prices are up 4.7% over the year. In the last recorded month, September, they were ahead by another 0.4%.

Several other parts also show rising prices. In Rutland they rose by 1.4% during September and year-on-year rises were recorded in Stoke-on-Trent and Neath Port Talbot in south Wales.

Prices in a number of London boroughs are still officially up (by as much as 2.7% in Hackney) for the year.

But estate agents in Hartlepool this week rubbished the findings and said prices have been falling in line with everywhere else. "It's grim out there - very grim and it's very annoying to read that the town's prices are supposedly rising," said a negotiator at one of the town's biggest agents. "We've been lowering asking prices of unsold properties by 1% for every month they've been on the market." She said agents used to selling 60 properties a month have seen sales dwindle into single figures.

"I can only think that some higher priced houses have been selling which sent the average price upwards."

House prices in Hartlepool are some of the lowest in Britain at £115,000 compared to the national average of £168,000.
Miles Brignall

Contributors

Patrick Collinson and Miles Brignall

The GuardianTramp

Related Content

Article image
Self-build: it's time to go Dutch

With the government claiming self-build is the answer to Britain's housing crisis, we look at how they do it in the Netherlands – and whether it would work here

Patrick Collinson

25, Nov, 2011 @11:02 PM

Article image
Home buying has peaked. Is it time for a rental renaissance?

All the figures suggest a nationwide decline in home ownership. Are we adopting the continental model?

Patrick Collinson, Rupert Jones, Richard Simpson

09, Jan, 2010 @12:07 AM

Buying property abroad: Italy

It is one of the countries where prices have not crashed in the past year but it's still a buyer's market. Graham Norwood and Patrick Collinson report

Graham Norwood and Patrick Collinson

07, Aug, 2009 @11:07 PM

Article image
Should we take out a loan for a house deposit?

We hear talk of a housing bubble and fear missing the boat

14, Sep, 2013 @6:00 AM

Article image
House prices up 4% – did anyone predict this rise?

Pundits had forecast that, at best, house prices would tread water in 2013. Now they are rising and experts are scrambling to revise their predictions

Hilary Osborne and Jill Papworth

06, Jul, 2013 @6:01 AM

Where does buy-to-let go from here?

Is this the grim future for buy-to-let investors as property prices begin to fall? Tony Levene and Rupert Jones report

Tony Levene and Rupert Jones

15, Mar, 2008 @12:08 AM

Article image
The £705,000 'affordable' home
Some housing associations are stretching the meaning of 'affordable home' to the limit

Patrick Collinson

22, Jun, 2012 @10:01 PM

Article image
Self-build a dream home for £150,000
Housing minister Grant Shapps says the government will 'make it easier' to find the finance and land build your own home

Miles Brignall

08, Jan, 2011 @12:01 AM

Article image
If you want your home to take a dive, invest in a swimming pool

As house prices continue to slide, it's tempting to try to boost the worth of your No 1 asset. Beware, writes Patrick Collinson

Patrick Collinson

25, Jul, 2008 @11:01 PM

Article image
The great property debate: Gazundering - another word for daylight robbery

After we highlighted the unwelcome return of one of the most bullying tactics in the whole homebuying minefield, you tell us your stories

25, Apr, 2008 @11:05 PM