Heather,(posted 7820 days ago)Please write to your MP about this matter, particularly the underselling, which you can definitely prove.
The lenders sold properties at a price less than market value for quick sales, this is common knowledge anyway, but you have proof of the issue. This caused private vendors to have to reduce their prices too, particularly in areas where lots of repossessions took place, but it still affected the whole country through knock-on effect. Why would anybody buy a property at the top of their budget price when they could buy a repossession for 5 or more grand less? The whole market was affected and private sellers had to reduce their selling prices to stand any chance of selling, thus bringing down market values. The lenders then reduced their repossession prices further - adding further to negative equity. We paid 55K for our flat in 1990, within two months of moving in the price had dropped by 1K. By 1995 we could buy a 3 bed house for £60K in the same area, and couldn't sell our 1 bed flat because their was no demand for small properties.
Lenders caused/added to negative equity through underselling repossessions and in my view, should be made to account for their actions.
Tracey