Liverpool city centre apartment prices to fall 25%

Apr 16 2008 by David Bartlett and Liam Murphy, Liverpool Daily Post

APARTMENTS in Liverpool city centre were last night predicted to see up to 25% wiped off their value in the current property market crisis.

Paul Sutton, of Liverpool-based Sutton Kersh, said the flats market would be hit much harder than other sec-tors like suburban houses, which could still see 10% falls.

It comes as the Daily Post reveal the latest official Land Registry figures show the value of apartments in the L postcode area fell by 6.4% from June to December, 2007, while all property types in the CH zone recorded losses.

Estate agents last night said sellers needed to adjust their expectations in the current market conditions.

Property industry insiders said the slowdown on Merseyside was starting to bite estate agents so hard that some were laying off staff.

Mr Sutton said his company had not shed staff, but warned that no agency could rule out having to make redundancies.

There has also been some consolidation in the agency sector – Bradshaw, Farnham and Lea, of West Wirral, recently bought out Prenton-based Manor Bourne.

Economist Peter Stoney, honorary senior fellow at Liverpool University, said people should be “moderately” worried about the housing market, predict-ing it would be summer before prices start stabilising.

He said the Bank of Eng-land’s Monetary Policy Com-mittee should have been bolder in cutting interest rates, which stand at 5%.

The warnings came as the Royal Institute of Chartered Surveyors said house prices in the North West declined for the eighth consecutive month and at the fastest pace since July, 1995.

Mr Sutton said: “In 2007, there was a definite harden-ing of the market; we saw a change from a sellers market to a buyers market. But the change in September/October time, after the Northern Rock crisis, was dramatic.

“When people saw the crisis, a lot were absolutely petrified, so the five months to February were very tough.”

He added: “Last year, people were bothered by interest rates, now what’s influencing people is the availability of mortgages. Prices have already fallen, there’s no question about it.”

Liverpool city centre flats have been the worst hit because of the sheer number built over the past seven years, said Mr Sutton.

“Falls of 20-25% are possible for people who bought two or three years ago.”

In December, it was reveal-ed how a two-bed apartment in Liverpool’s original Beet-ham Tower, which was bought for £206,500 in May, 2004, sold for just £101,000 at auction.

While this was accepted as a freak event, it was a signal of the problems in the sector.

Paul Lea, of Bradshaw, Farnham and Lea, said differ-ent parts of the Wirral market were reacting differently.

His company has seen two sales circa £2.5m go through in Caldy in the last week.

Mr Lea said: “Some of these people are inflation-proof. It’s not all doom and gloom and easier to get a mortgage than the papers would have you believe. We had a client get a £1.5m mortgage, which you would think impossible if you listened to the news.

“But it’s fair to say the rest of the market is bad – tough trading. But we are saying to vendors get ahead of the market, drop your price and you will sell.”

Mr Lea, whose agency works primarily in the Hoy-lake, West Kirby and Heswall areas, said: “I’ve been through the slumps of the early 1990s and the late 1970s, and I don’t think you can compare the current situation to those – mortgage rates are lower, unemployment is lower.”

Peter Horner, of Wallasey estate agents Bakewell and Horner, said: “It’s awful, absolutely dreadful at the moment.

“I have not seen it this bad since the early 1990s when prices dropped 25% or there-abouts, although then mort-gage rates were a lot higher.”

He predicted house prices, which he says have fallen 10% over the last 12 months for houses over £200,000, will continue to fall this year “unless something drastic happens”.

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