Page last updated at 23:24 GMT, Thursday, 9 October 2008 00:24 UK

Flats 'see biggest price falls'

Flats in Birmingham
City centre regeneration sites feature heavily in the survey

City centre flats dominate a survey indicating the 10 areas in England and Wales with the biggest annual fall in property prices.

Birmingham Canal tops the list - compiled by property website mouseprice.com - after a 17.3% drop in the value of homes in the past year.

The study found properties west of the city centre - mostly new-build flats - fell to an average value of 153,500.

The list also includes areas in Manchester, Leeds and London.

"Interestingly, the greatest price falls are not connected with how expensive the relative locations are," said Selwyn Lim, director of Mouseprice.com.

"Price falls have not discriminated according to how much a property cost in the first place or how desirable an area was."

'No surprise'

First-time buyers Matt Cartwright and his wife Laura, both 26, bought a two-bedroom flat in the Birmingham Canal area for 185,000 in February.

These areas attracted the most buy-to-let investors during the boom and have recently suffered due to supply outstripping demand
Selwyn Lim, Mouseprice.com

"We wanted to move away from renting, but knew we were buying at the top of the market," said Mr Cartwright, who works for Network Rail.

Their property would now have dropped in value to 153,000 if it followed the average identified by this survey.

"If anything happened in the market we knew that this kind of property would suffer first, but we are not worried because we are not going to sell it for some time," he added.

The couple, who have been married for 18 months, said they were happy in the area, having rented a home there for a couple of years. They had been spending 675 a month on rent, but had managed to secure a five-year 5.5% fixed-rate mortgage with a 5% deposit.

They wanted to buy somewhere to live in, rather than as an investment, and were attracted by the location which is close to the railway station, bars, shops, restaurants and a gym.

"It is a nice place to come back to after work and suits our lifestyle," Mr Cartwright said.

Buy-to-let

While the Cartwrights might be happy with their purchase, they are aware that many properties in the area have been bought by property investors who have since tried to sell up.

Buy to let landlord Murray McGregor: 'A lot of the flats I have I couldn't sell now'

The area includes developments such as Centenary Plaza and King Edwards Wharf, both built in 2003, where buyers have been selling for less than they bought properties for, according to Mouseprice.com.

The nine other areas and streets that feature in the survey are dominated by similar city centre developments across the country.

Many are apartment blocks built alongside canals and rivers in old brown field or industrial sites.

"These areas attracted the most buy-to-let investors during the boom and have recently suffered due to supply outstripping demand," said Mr Lim, of Mouseprice.com.

Deansgate in Manchester, Erebus Drive in Thamesmead in London, Elmwood Lane in Leeds, and Millsands in Sheffield complete the five areas with the biggest falls in prices.

The following five are Lakenham in Norwich, Abbey Road in Barking, Dame Dorothy Street in Sunderland, Russell Road in London NW9 and Walton Hall Avenue in Liverpool.

The survey was based on Land Registry sale price statistics and updated with valuation data gathered from surveyors.

Average values were narrowed down to postcode level using an automated system. Streets where the highest number of properties sold at a loss were then identified within these areas.

AREAS WITH THE LARGEST HOUSE PRICE FALLS

Area Average value Oct 08 Annual price fall
Birmingham Canal, Birmingham, B1 153,500 17.3%
Deansgate, Manchester, M3 196,500 17.1%
Erebus Drive, London, SE28 208,500 16.9%
Elmwood Lane, Leeds, LS2 149,000 16.3%
Millsands, Sheffield, S3 120,500 15.1%
Lakenham, Norwich, NR1 140,500 14.8%
Abbey Road, Barking, IG11 166,000 14.7%
Dame Dorothy Street, Sunderland, SR6 132,000 13.7%
Russell Road, London, NW9 266,000 12.8%
Walton Hall Avenue, Liverpool, L9 87,000 12.6%




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