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Property buyers, sellers and investors are usually eager to hear about the latest real estate hot spots but now new research reveals the UK’s property investment black spots. Property prices in some of the worst performing areas are falling by more than 7% per year with popular areas in London featuring prominently in the top 20 black spots compiled by Home.co.uk. The firm’s research also shows that landlords’ return on investment is also on the slide, with 11 locations recording negative real percentage yield, which occurs when the value of the property depreciates by more than the annual rent. Moreover, it’s not just the North that is suffering price falls. The figures for the 12 months to September this year show Belgravia has seen a slump of 7.6% in annual house prices and the real percentage yield in the same month was down 4.4%. In Soho, another popular London borough, property prices over the same period fell by 6.8% and the real yield for September was minus 3.5%. Meanwhile in Westminster, the annual property price fall recorded in September was -5.2%, with landlords facing a real yield of -1.8%. Seaside towns are another casualty of the cooling property market. Prices have fallen by 7.1% over the 12 months to September in Poole, Dorset, where the real yield for landlords is -2.5%. In Margate, property prices fell by 6% over the same period and the real yield was -2.1% in September. Towns and cities in the North East of England have also been badly affected as austerity measures and joblessness continue to bite. Property price falls in the 12 months to September have been recorded in Newcastle upon Tyne, South Shields, Gateshead, Middlesbrough, North Shields, Hartlepool and Stockton on Tees. Of these, the coastal town of Hartlepool has suffered the most, with annual property prices dipping by 7.5% and the real yield for landlords standing at -1.8% in September. The figures show that, whilst overall the UK property market still has considerable momentum, property investments can suffer significant losses in certain locations, at least in the short term. According to the firm’s October Asking Price Index, property prices across the North East of England fell by 0.1% between September and October this year, and Wales saw the biggest monthly slump over the same period, of 0.4%. Meanwhile, despite falling prices in central London, London and East Anglia both saw rises in average property prices of 1.1% between September and October. Outside of such property hot spots, vendors’ expectations are clearly being moderated. The total number of properties that are on the market at a reduced price has risen to a two year high and now represents 13% of the total stock of property for sale. According to Home.co.uk director Doug Shephard price falls in the super rich suburbs of central London have come about for very different reasons to the falls observed in the North. ‘Prices soared in central London post financial crisis as foreign investors sought safe haven investments. Such… Continue reading →
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