Four in ten homeowners forced to sell at a loss

41% of homes bought since 2007 have been sold at a loss in the UK housing market. 


The research carried out by shared equity firm Castle Trust investigated house purchases and sales from January 2007 to January 2013. 

During the six year period they found that 41% of houses bought after 2007 were sold at a loss with an average shortfall of 11%.  Over the same period 56% of homes were sold at a profit, the average being £45,199.

Director of Castle Trust Sean Oldfield said that the figures highlighted the volatility of the current market;

“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 much for risky that everyone appreciates.”

Within the figures there were some dramatic regional variations with 48% selling at a loss in the north of England compared with only 38.5% in the South East and in London the figure was down as low as 26.1%.

The biggest reason for wanting to sell was to buy a new home at a good price.  Other situations which prompted a move were family breakdown, the need for more space and having to relocate for work.

Compared to the period between 1995 and 2006 when 95% of houses were sold at a profit, the probability of making a loss significantly increased after 2007.  House prices are down on average 11% since their peak in 2007.

However, the market is slowly edging upwards with the house prices averaging £162,080 in December 2012 compared with £151,251 in April 2009.

Simon Rubhsohn, Chief Economist at the Royal Institution of Chartered Surveyors (RICS) said;

“This has been a slow recovery, but I think prices will continue to rise.  The Government’s Funding for Lending scheme is already bringing down mortgage rates….Whilst it’s clearly painful for those sitting on losses, the low prices have provided opportunities for first time buyers.”

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