Up to one in four homes on market still unsold after a year

Up to one in four properties have remained unsold for a year in some parts of Britain, according to a new assessment of stagnation in the housing market. In Rochdale, Lancashire, as many as 26 per cent of properties for sale have languished on the market since the beginning of 2008. A string of other northern towns have been hit by problems as difficulties finding mortgages have prevented buyers completing deals and over-optimistic sellers have failed to react to tumbling house prices.

A survey by the property search website Globrix found that 23 per cent of properties for sale in Aberystwyth, Wales, had failed to find a buyer since the start of the year, while one in five homes on the market in Swanage have stayed on the market for 12 months.

In Yorkshire, the firm said 18 per cent of homes put on the market in Pontefract were still for sale a year later, while in Ripon and Wetherby, 15 per cent of homes remained unsold for a year.

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By contrast, only 5 per cent of properties were on the market for a year in London and 6 per cent in Birmingham, although that figure rose to 13 per cent in Manchester, where there has been a boom in speculative development.

Daniel Lee, chief executive of Globrix, said the figures reflected a "terrible year for the property market". He said: "The gridlock in the market has been a result of the banks' reluctance to lend and an unwillingness by sellers to lower their asking prices to more realistic levels."

Meanwhile, a separate survey by the property firm Hometrack found prices had fallen by 8.7 per cent in the past 12 months and predicted a further slump in house sales, already 45 per cent down on last year. The firm's head of research, Richard Donnell, said that prices could fall by a further 10 per cent next year. He said: "The onset of recession and the prospect of rising unemployment over 2009 will continue to dampen confidence and, in turn, demand, which will inevitably lead to further house price falls in the next 12 months."

He added: "People who are unrealistic about prices will not get viewings. Property is staying on the market and we will see very low levels of turnover next year. You can sell a home but it has to be at a realistic price."

Recent surveys have found a rapid decline in the housing market. Earlier this month the Halifax, Britain's biggest mortgage lender, reported a 2.6 per cent fall in house prices for November, the biggest drop since 1992, and 18 per cent down on the market peak in August. Forecasters have predicted a drop in prices of up to 25 per cent for this year and next.

Yesterday, Vince Cable, the Liberal Democrat Treasury spokesman, said surveys had pointed to a 20 per cent fall in house prices since the peak of the market last year, with further falls of up to 20 per cent to come.

He said: "People feel poorer because they have often seen their own personal wealth tied up in the value of property and very large numbers of people are in or approaching negative equity, which is one factor which has been inhibiting people's spending."

'If only we'd been a year and a half earlier'

Ian Body, 32, a mechanical engineer, and his wife, Minna, put their two-bedroom south-west London home on the market 12 months ago, as they plan to move to Australia in March . "It's unfortunate," Mr Body said. "If only we'd been a year and a half earlier, we'd be taking a large sum with us to Australia. I'm slightly amazed by the slow reaction of the Government to the property market." Mr Body paid £178,000 for the two-bedroom home in Streatham in summer 2006. He renovated it and listed it on houseladder.co.uk for £295,000 in December 2007. "That was really very optimistic and I hadn't finished renovating the home so I wasn't expecting a quick sale," Mr Body said. This autumn, he dropped the price to £225,000 and received one offer for £160,000, which would not cover the mortgage. Now the property is for sale with Foxtons for £209,950. "I've spent more than £200,000 in costs on this home, but now, if someone offered me £190,000, I'd seriously consider it," Mr Body said.