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Two in five homes sold 'at a loss' since 2007

Lewis Stickley/PA Wire/Press Association Images

Two in five homes have been sold for a loss in England and Wales since 2007, while more than half made a profit, research has found.

Almost three-quarters (71%) of houses sold in London during this period made a profit despite the tough economy, compared with less than half in Yorkshire and the Humber, the North and the East Midlands, shared equity firm Castle Trust found.

Of the 41% of homes sold for a loss across the country, the average shortfall was £24,430, according to the firm's analysis of Land Registry figures.

Over the same period, 56% of homes were sold for an increase on the original amount the seller paid, making an average sum of £45,199.

London house prices have tended to buck the national trend by recording relatively strong increases, much of which has been put down to wealthy overseas buyers who see the English capital as a safe haven amid the troubles of the eurozone.

Lenders are expecting housing market activity to pick up this year amid Government efforts to improve mortgage availability and give people a helping hand on to the property ladder.

[Compare cheap mortgages]

However, while activity is thought likely to increase, predictions for house prices this year have been more mixed, with some reports forecasting increases, some decreases and others saying prices will remain broadly flat across the country.

Property search website Zoopla recently reported evidence that sellers are becoming more confident in taking a firmer approach to their pricing this year.

Earlier this month, Zoopla said 31% of homes on the market have had the asking price cut - the lowest proportion in two and a half years and a sharp drop from 37% a year ago.

A separate survey by Castle Trust among more than 2,000 people found that the most common reason people had for selling their home at a loss was that they wanted to trade up while house prices were still relatively flat.

Other popular reasons for selling at a loss included divorce, the house being too cramped, the need to relocate for work or no longer being able to afford the mortgage.

Although most homes have been sold for a profit since 2007, researchers said that the probability of making a loss has increased significantly compared with long-term averages, with 92% of homes being sold for a profit since 1995.

[Free guide: Will UK house prices crash in 2013?]

Regional breakdown of sales between January 2007 and January 2013:

Area, Percentage sold at a loss, Percentage sold at a profit, (remaining were 'break even' transactions)

Yorkshire and the Humber 48.2%, 48%,

North, 48%, 4.2%, 47.8%

East Midlands, 47.2%, 48.9%

East Anglia, 44.7%, 51.8%

Wales, 44.6%, 51.2%

West Midlands, 44.4%, 51.5%

South West, 43.6%, 52.9%

North West, 41.1%, 54.5%

South East, 38.5%, 57.6%

London, 26.1%, 71.1%

Source: Press Association

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