On the BBC programme The Truth About Property it was claimed that city centre new builds had caused those who purchased them to lose out when they were sold. The spotlight focused on developments in Leeds, Manchester and Birmingham, where new properties were being built, but it was claimed that prices were out of the reach of buyers in the area.
In Leeds, in one example given, the block of flats named Aspect 14 saw one owner purchase a flat for £222,000 in October 2003, to sell it three years later for almost £100,000 less. Another example was given with a buyer purchasing a property for £189,000 in March 2004, only to lose thousands when it sold for £131,000 in November 2006.
It was reported that a lot of flats in the development had let very quickly. However, some of the last sales in the block had seen significant losses. Investment club, Inside Track, which had worked with the Aspect 14 development, claimed that rental coverage was high with respect to the mortgage payment, so in the medium to long term it would be an ‘absolutely fine investment’.
Anthony McKay, executive at Inside Track, commented: “Do I believe that some of the people have sold some of the units? Yes, they have, and I know that they’ve sold below some of the prices that we have sold them at.”
Simon Chalk, mortgage planner at Mortgage Portfolio Services, said: “We have had clients old and new wanting to buy new builds but I try to put them off as they get below asking price. In the short term we will make the sale, but they won’t be around in five to 10 years time.”
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