The price of a new-build flat drops on average by more than one-quarter when resold, according to data from auction houses that also confirm the rise in socalled “distressed” sales. Financial Times (Saturday)

According to data analysing sales over the past three years, the average price drop between official Land Registry figures and subsequent sales at auction was 26%.

The figures underline the crisis in the new home market and will exacerbate the fears of thousands of firsttime buyers who have bought flats off-plan.

Just 4% of newbuild flats were resold at a higher price between January 2005 and February 2008, according to Allsop and Essential Information Group, the industry data provider.

Many of the flats in the study were likely to have been bought for buy-to-let purposes, but were repossessed when rent did not meet expectations, said EIG’s David Sandeman.