South West homes were sold at a loss
More than four out of ten South West homes changing hands during the economic downturn were sold at a loss, a new report has found.
Analysis of the struggling regional market showed that 17,925 properties – 43.6% of the total – lost the seller an average £23,056, or 10.6%, on the deal.
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The shortfall, between January 2007 and 2013 equates to a colossal £413 million, housing investment and shared equity provider, Castle Trust has calculated.
But despite the gloom over a sluggish and stalled market, the majority – 21,671 or 52.9% of the total – actually yielded a profit.
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And with a 16.8% return – those who sold for above the price they bought pocketed an average £36,487 – the total in the black amounted to £790 million.
However, this must be seen in terms of transactions since 1995 – which include the property bubble fuelled by available credit which led to the crash – when a massive 91.5% of all homes returned a profit, with just 7.5% sold at a loss.
Sean Oldfield, Castle Trust chief executive officer, said house prices remained "volatile" and home ownership was "much more risky than most people appreciate".
The most common reason for selling cited among those who lost out was to buy a good home at a new price – 18%, followed by divorce or separation at 14% and the need to upsize at 13%.
The risk of selling at a loss in the South West was said to be the fourth lowest of the 10 regions in England and Wales.
Greater London offered the best chance to make money and Yorkshire and Humber the worst.
7 Comments
by Pelagian
Monday, March 04 2013, 10:04PM
“Why do the Cornish feel so put upon by people from 'outside the area' putting the price of houses up ? You just don't hear that in London and born and bred Londoners have that effect multiplied exponentially.”
by SmartyC
Monday, March 04 2013, 8:06PM
“Not sure you need to be a "Cornish Nationalist" to want ordinary people to be able to afford ordinary houses again.”
by Big_Ger
Monday, March 04 2013, 7:58PM
“The dream of the Cornish nationalists has come true, Cornish people are selling their homes at below market value! Now let's hope they sold at a loss only to "local people", or at least only to people who "feel Cornish".”
by SmartyC
Monday, March 04 2013, 7:27PM
“I see no reason why the shouldn't, and every reason why they should.
You've only got to look at history, the property boom/bust cycle goes back decades again and again. We've just had the biggest boom in history, why would it just dip a little and then flat-line this time?
The Government have been doing all they can to try and prop up property values but they're all out of ideas now (can't lower interest rates any further).
Ultimately they can't buck the markets for ever.”
by Free2opine
Monday, March 04 2013, 3:05PM
“@SmartyC I'll take your word for it. As you say good news if that is the case. Let's hope they keep going the same way for a while until they get to sensible prices.”
by SmartyC
Monday, March 04 2013, 2:14PM
“It would appear to be actual, not inferred. Witness people who made a profit after buying much earlier, if they bought for £75,000 in 1995, saw it rise to £175,000 and the drop back to £150,000 then if it were "inferred"(ie compared to peak prices) they'd be shown as a loss too but they're not.
Whatever, it's clear prices are on their way down at last, and with plenty more scope for drops.
Good news for most”
by Free2opine
Monday, March 04 2013, 1:10PM
“Can whoever wrote this report please confirm that the loss was actual e.g the seller bought a house for say £200k and sold at a loss for £170k. Or do you in fact mean, that the seller bought their house at £200k and subsequently thought their house was worth £250k but had to sell it at £220k. There is a slight difference between actual loss and inferred loss.”