Average house prices in more than half of UK towns and cities are still below 2007 levels, new research has claimed, trapping hundreds of thousands of people who bought at the top of the market in negative equity.
Around 1.5 million property transactions were completed at the top of the market before the banking collapse of 2008.
The findings from online estate agent HouseSimple.com suggest that whereas some parts of the country such as London have enjoyed double-digit growth, house prices in towns including Blackpool and Middlesbrough, are still almost 30 per cent lower than the pre-crisis peak.
It means that anyone who wants to relocate in those areas faces a harsh dilemma of either suffering a loss from the sale of his property or staying put and waiting until the price at least recovers to his initial buy-deal.
HouseSimple's poll, which looked at 75 major towns and cities, showed that 17 out of 20 worst affected areas were in the north of England. Blackburn and Liverpool were also in the top five, with average house prices still 25 per cent and 23 per cent below their pre-crash highs.
The north west was the worst hit, with the region accounting for four in ten of the top 20 negative equity towns and cities.
However, homeowners in the south should consider themselves more lucky, with those from London noting a 56 per cent rise in the average property price since 2007 – from £339,511 to £530,368 today.
Properties in Winchester and Stevenage have also performed well, with prices up by 44 per cent and 39 per cent respectively.
HouseSimple chief executive, Alex Gosling, said: “London homeowners have watched as their properties have risen in value substantially since 2008 but, thousands of people around the country have had to put their lives on hold, unable to move because they are trapped in negative equity. “
“There is light at the end of the tunnel with prices now climbing across the country, and that should help bring many more homeowners out of negative equity. However, for people living in towns like Blackpool and Middlesbrough, it’s going to take some time before prices come close to 2007 levels.”