House prices fall by over 20% in some towns

Average asking prices for homes have dropped by more than 20 per cent in some towns, research has found.

Since September 2008, when the financial crisis began to accelerate, a total of 16 towns have seen housing prices slump by over 20 per cent, property finder Globrix said.

Blackpool has suffered the worst falls, with average asking prices down 28.2 per cent, from £167,140 to £120,000 over the last six months.

Kilmarnock in Scotland saw the second steepest falls, with the average home shedding 26.5 per cent of its value over the period.

The south has also been hit hard, with sharp falls in the picturesque towns of Windsor (21 per cent), Lewes (22 per cent) and Hertford (26.5 per cent), while homeowners in Bridgend, Wales, have seen falls of 22.5 per cent.

Daniel Lee, chief executive of Globrix, said: "Average UK asking prices are down by around 11 per cent since September of last year but the property slump has clearly hit some towns and cities more severely than others."

The concern is that such sharp falls will leave many in negative equity, with some analysts predicting five million households will owe more on their homes than they are worth by the end of the year.

Homeowners who cannot repay their loan from the proceeds of a sale risk being plunged into debt if they are forced to sell.

However, Mr Lee homeowners should not be too worried by the figures.

"Although, on the surface, these figures make grim reading, homeowners in these areas shouldn't panic. For many this will simply be a paper loss, so if possible they just need to sit tight.

"Sellers also need to remember that if their property has fallen in value by 20 per cent, the property they're looking to buy will almost certainly fallen in value as well, so the figure shouldn't be looked at in isolation," he said.