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PROPERTY owners on Ipswich's Waterfront facing losses running into tens of thousands of pounds amid a dramatic price plunge, it has emerged.
New figures show several luxury flats have been repossessed due to mortgage defaults with each of them going under the hammer for a fraction of their original market price.
One Ipswich flat - apartment 502 in Anchor Street on Persimmon's Orwell Quay development - saw the biggest fall in value of any of the 1,200 flats repossessed in the UK over the past three years.
The luxury two-bedroom property, which overlooks the docks, was initially bought for £268,000 in June 2006 but went under the hammer for just £133,000 some three months ago.
Statistics show a total of nine flats on the Orwell Quay development have been repossessed with losses ranging from 33% to 50% of original market value.
Commentators nationally fear the bottom is falling out of the new build market, many of which are bought by buy-to-let investors, due to properties being overpriced.
This leaves first-time buyers struggling to afford mortgages while landlords are unable to attract tenants on the level of rent necessary to cover their costs.
The drop in prices on the auction market has been labelled a “market correction”.
David Sandeman, whose company Essential Information Group compiled the repossession data, said the findings reflect a potential issue with new build properties in the town being overpriced.
He said: “Investors are not doing fundamental due diligence by failing to phone estate agents to check the price of flats in the area when they first buy.
“They have got to do their research and homework. The buy-to-let market and new build market is alive and well as long as people are sensible about the price.”
Paul Winter, chief executive at Ipswich Building Society, said: “Property is a long term investment and people should look at it that way but like a new car, the second hand market is not as lucrative as brand new housing at the moment.
“The case of the Anchor Street apartment is unusual but in many cases there can be up to a 25% drop.”
Wharfside Regeneration Ltd, the developers behind Cranfield Mill, currently being constructed on the Waterfront, were unavailable for comment as were Persimmon Homes, developers of Orwell Quay.
A spokeswoman for City Living Developments, the developers behind the 350-apartment Regatta Quay, declined to comment on the matter but revealed around half of the first phase of 80 apartments have already been sold.
New figures show several luxury flats have been repossessed due to mortgage defaults with each of them going under the hammer for a fraction of their original market price.
One Ipswich flat - apartment 502 in Anchor Street on Persimmon's Orwell Quay development - saw the biggest fall in value of any of the 1,200 flats repossessed in the UK over the past three years.
The luxury two-bedroom property, which overlooks the docks, was initially bought for £268,000 in June 2006 but went under the hammer for just £133,000 some three months ago.
Statistics show a total of nine flats on the Orwell Quay development have been repossessed with losses ranging from 33% to 50% of original market value.
Commentators nationally fear the bottom is falling out of the new build market, many of which are bought by buy-to-let investors, due to properties being overpriced.
This leaves first-time buyers struggling to afford mortgages while landlords are unable to attract tenants on the level of rent necessary to cover their costs.
The drop in prices on the auction market has been labelled a “market correction”.
David Sandeman, whose company Essential Information Group compiled the repossession data, said the findings reflect a potential issue with new build properties in the town being overpriced.
He said: “Investors are not doing fundamental due diligence by failing to phone estate agents to check the price of flats in the area when they first buy.
“They have got to do their research and homework. The buy-to-let market and new build market is alive and well as long as people are sensible about the price.”
Paul Winter, chief executive at Ipswich Building Society, said: “Property is a long term investment and people should look at it that way but like a new car, the second hand market is not as lucrative as brand new housing at the moment.
“The case of the Anchor Street apartment is unusual but in many cases there can be up to a 25% drop.”
Wharfside Regeneration Ltd, the developers behind Cranfield Mill, currently being constructed on the Waterfront, were unavailable for comment as were Persimmon Homes, developers of Orwell Quay.
A spokeswoman for City Living Developments, the developers behind the 350-apartment Regatta Quay, declined to comment on the matter but revealed around half of the first phase of 80 apartments have already been sold.
More new build falls
