Gloucester Property Market Hit Hard by UK Housing Market Crash

Gloucester property prices had fallen by around 16% up till February, according to Land Registry data, an equal percentage to the average for England in Wales. Property in Gloucester, like almost everywhere else, grew massively from 2004 onwards. The growth between Feb 2004 and Feb 2005 alone was over 10%, from £153,434 to £170,231.

That growth has all but been reversed. The average price of a house in Gloucester is now £166,867, and that is based on the Land Registry figures taken us up to February, the price is likely to be lower again when the Land Registry releases its figures for March.

House prices in Gloucester falling by so much so fast has left hundreds, if not thousands of people in negative equity, and worse, hundreds more facing repossession.

"The price slide hit Gloucester hard," said Joseph Harwood, director of Rock Star Investment Group's Gloucester Division.

"Indexes like the Land Registry etc don't tell the whole story. On the one-hand you have people struggling to avoid foreclosure and wondering where they will be living a month down the line, and on the other you have people fed up of the low returns being offered by the stock market or savings, continued Joseph.

"We are in a position to help both parties, by buying the distressed properties at a bargain but fair price, which we then sell to investors as a tenanted property which has a guaranteed return of at least 4-7% per annum -- a lot more than what other investment vehicles are currently returning," he explained.

According to Joseph, the banks and major lenders are not hindering such transactions as many complain they are in the open market.

"We are picking up properties for 25-40% below their peak value, with mortgages of 70-75% LTV and less. The banks can see that such deals are not going to fall into negative worth, because even the most pessimistic forecasts do not suggest further price drops of 20% or more," he said, adding:

"Of course, the fact that a property purchased at these prices is better than the alternative, foreclosure, is obviously also a factor."

Experts including our own Liam Bailey forecast a bottom will be reached by mid-2010, but that prices will fall by no more than another 10-15%.

"Though Gloucester prices have fallen hard and fast so far, like many other places that do not and never have depended on the financial services or services sectors to any great degree, it is likely that the decline in Gloucester house prices will now start to stagnate; falling slowly between now and the end of this year. Perhaps another 5-10% decline between now and the end of the year, and maybe another 5% as it bobbles to find the bottom by no later than the middle of next year." Liam said.