130,000 homes sold at a loss

Since the 2007 peak in property prices, more than 130,000 homes have been sold at a loss, new research has revealed.

This is according to an in-depth analysis of housing transactions in England and Wales based on Land Registry data. It found that 40.7% were sold at a lower price than the original purchase.

The analysis, conducted by housing investment and shared equity provider Castle Trust, revealed that the average shortfall stood at £24,430, which is equivalent to 11% of the entire house price.

Sean Oldfield, chief executive officer of Castle Trust, said: “Since the downturn, over 130,000 families have made a loss on their home placing them under enormous financial and emotional pressures.

“When you take into account the costs associated with moving home, from stamp duty to solicitor’s fees, this situation becomes even worse.”

In the same period, 55.6% of homes were sold at a profit, generating 20.4% of the house price on average, while 3.7% of properties sold for the original purchase price.

The Trust said that the probability of making a loss and the size of average deficit has rocketed since the economic downturn began its assault on the UK.

Since 1995, just 7.5% of homes sold at a loss while 91.5% sold for a profit. 1% sold for the original sale price.

Mr Oldfield continued: “The long-term performance of house prices shows national house price growth in line with national wage growth, but it is clear that individual house prices are really volatile and that home ownership is risky – much more risky than almost everyone appreciates.”

13% of homeowners have voiced concerns that they may be forced to sell their current home for less than the purchase price, a figure which rises to a quarter among those aged 18-34.

Posted by: WarrenWilson Categories: Estate Agents, Finance, House Prices Tags: , 5 Comments

5 Responses to 130,000 homes sold at a loss

  1. avatar Robert Forsythe says:

    The only properties I have seen sold at a loss are ones that are falling into arrears or repossessed.The rest if they are not in trouble are demanding the asking price or are refusing to sell,simple as that.

  2. avatar Paul Maddocks says:

    What isn’t mentioned is that the loss is realised if the seller is downsizing. If not then the the purchase price of the next house will be comparably lower.

  3. avatar Pianist says:

    I have noticed a lot of properties have taken up to and sometimes over £20,000 off the original market price – does this mean that the slump really does affect us all at the end of the day -and now coming back to earth? Although, saying that – property is only a material thing in the way that when we sell we also need to buy, so very rarely make a profit unless downsizing.
    I do feel for the first time buyers, but it has been hard for us all along the line even though we have all been there, be it due to high interest, high prices or little movement on the sales market at some point along the line.

  4. avatar Lizzey says:

    I am sorry to say that I find this article to be misleading, although I must say that I am not a property professional, so please forgive my comment. Of all the articles I have read recently this is so out of touch, the reality is that house prices are still way too high! in some cases asking prices are almost double what they need to be. The property market became over inflated, prices were way over being in line with average wages, and they are again now, they need to come down. You know that when you sign for a mortgage prices can go up as well as down, who will be blamed this time when a readjustment is needed, you won’t be able to blame the banks now. It is asking prices that must come down, it is all relavent, it is only if money is being taken out the country you loose out, If you are buying back into the same market it is all relavent. Offer what you think that property is worth to you, be careful not to pay too much, the asking price may be about right(doubtful)or it may be 70,000 more than it should have been set by the developer or the estate agent. What is clear is that the market as a whole needs to come down to a sustainable level for market forces as they are today, if I was to buy an average house today for £250,000 and it then dropped by £20,000 after a month then it doesn’t matter as long as everything else has, I have not lost, and the costs involved are an inevitable side effect. I thought house prices had dropped by half in some cases from the dizzy hey day of artificially held up property prices and greed. I must read this research.

  5. avatar Maria S says:

    I am one of the people who lost almost £40K on a £250K house just over a year ago. This is an awful fact for so many people where the end result of that person/family moving to rented accommodation and away from the property ladder. However it is not so painful if you are purchasing an alternative property. I saved a similar percentage on the price/value of the replacement property I bought – I did this knowingly and strategically. The secret is to stay in the game and try to hold onto at very least the lower rung of the property ladder at these financially tight times.
    Go out fighting!