West Midlands

In October 2008, one survey indicating the 10 areas in England and Wales with the biggest annual fall in property prices was dominated by city centre flats.

The survey was compiled by the property website mouseprice.com.

Birmingham Canal topped the list with a drop in value of 17.3%, closely followed by Deansgate in Manchester with a 17.1% drop.

In Elmwood Lane, Leeds the drop was 16.3% and in Lakenham in Norwich 14.8%.

Worried buy-to-let owner Bill Buckley

Across the country, apartment prices are crashing, leaving buy-to-let landlords high and dry.

Bill Buckley took out a buy-to-let mortgage on a two bed luxury flat in The Rotunda in 2007. 

But he now questions – whether he should have become a Midlands landlord in the first place.

The expert's view

Bill knows a thing or two about consumer issues – he made his name as one of Esther Rantzen’s sidekicks on That’s Life. 

So he thought it would be a sound investment to buy a two bed luxury flat for £286,000 in Birmingham’s Rotunda.

The Rotunda is an iconic building in the heart of Birmingham and a symbol for the city’s regeneration. 

But with property prices crashing all around him, Bill’s worried about the value of his investment. 

Tony McKeon: the honeymoon period's over

So he went to see Tony McKeon, the director of Residential Lettings Group, to find out about the state of the market:

He told Bill: "Your honeymoon period is over… so obviously you’re forking out of your pocket to cover the mortgage on the property that you had bought.

"The rental income coming in is a lot less than you originally thought you’d achieve on your property."

Tony also gave Bill a valuation on his flat.  He believes it's worth £215,000.  So in just one year Bill has lost £60,000! 

But Bill isn't the only buy-to-let landlord that has lost money. 

Since 2004 there has been a huge rise in the number of landlords. 

For some the recent changes in the property market have been devastating.

The case study

Christopher Miller is a Midlands landlord who bought 31 flats on buy to let mortgages.

He had properties in Stoke on Trent, Coventry, Manchester and Nottingham.

But things took a turn for the worse for Christopher when his mortgage repayments started to outweigh his rental income. 

Christopher Miller lost £3m

He tried to borrow more money from his banks but was refused.  

All his properties were repossessed and he lost an astounding 3 million pounds!

Christopher says he’s had to move to Bulgaria to get away from it all:

"Basically remaining in the UK was not a sensible option. 

Clearly I need to clear my head. 

Having a 3 million pound loss is devastating."

To make matters worse Christopher Miller could not sell his flats for the prices he paid in 2006 and had to watch them being auctioned off for a fraction of what he paid:

"Stoke is really the worst example I have. 

"I had six units in Stoke and I paid about £110,000 for the cheapest one bed flat and £137,000 for a two bedroom flat. 

"Three of them have been sold at auction and they got between £50,000 and £55,000 each”.

Christopher now believes that the flats were overvalued and is one of many landlords trying to sue their valuers.

The Future

So with property prices crashing and the number of repossessions up - is there any need for new builds? 

Through the Freedom of Information Act, Inside Out has discovered that there were 3,651 empty or unfurnished properties listed on Birmingham’s Council tax database in June 2008. 

But the fact that property prices are falling and city centre flats stand empty has not put off some developers. 

For example the former Mint in Birmingham which closed in 2003 is now being redeveloped into hundreds of flats and office space. 

Sean Gaynham the managing surveyor from The Mint says he believes that the market will pick up:

"I don’t think people are optimistic because its going to get better but there are 6m homes which are needed in this country straight away"