City centre flats across the country have seen the largest falls in value since the start of the housing slump, with some losing as much as 17 per cent of their value over the past 12 months.
According to new data from property experts mouseprice.com, flats in the Birmingham Canal area have seen the greatest falls in value, while properties in Deansgate, Manchester, were the second-fastest fallers.
Mouseprice said the falls were not necessarily linked to the desirability of an area. Many areas that have suffered the biggest falls are those where a large number of flats have been built over the past few years, for which developers are struggling to find buyers.
"Price falls have not discriminated according to how much a property cost in the first place or how desirable an area was," said Selwyn Lim, the director of mouseprice.com. "A clear theme has emerged, with the top 10 areas dominated by northern city-centre regeneration sites. These areas attracted the most buy-to-let investors in the boom and have recently suffered due to supply outstripping demand. But falls are not limited to regeneration areas and have spread to unexpected locations."
Melanie Bien, a director of the independent mortgage broker Savills Private Finance, said flats often tend to lose their value faster than houses during a property slump, but reassured home owners and buy-to-let investors that they should not be concerned if they are not looking to sell in the short term.
"Most buy-to-let investors are in it for the long haul – they are not speculators but long-term investors," she said. "They view buy-to-let as an alternative to a pension when planning for retirement so are not looking to make a quick buck and are unlikely to sell up even if prices fall. The only issue may be extended void periods when they have to cover the mortgage but savvy professional landlords factor such potential outcomes into the equation."
The deepening of the banking crisis took its toll on the mortgage market, as lenders continued to withdraw their cheapest products. Abbey withdrew all its tracker products on Thursday evening, replacing them with products which are 0.5 per cent more expensive.
"Choice may be reducing, but there are enough products out there for borrowers to find a suitable deal," said Darren Cook of moneyfacts.co.uk. "The difficulties lie in the lack of liquidity within the market and providers having no appetite or being unable to lend on a larger scale. The price list shows that mortgages are getting a little cheaper, but the stock rooms are nearly empty."Reuse content