The RAPID Report (Residential Auction Property Investment Data)
The most recent report had the following astonishing findings:

New Build

Across all four geographic areas (Central and Inner London; Outer London, South East and Eastern; Midlands, Wales and South West; Northern England and Scotland) the average drop for new build flats between the original Land Registry price and subsequent sale price at auction between January 2005 and February 2008 is -26%.
Out of the sample set of 535 cases, 82% were known to be distressed, ie those conducted on behalf of sellers such as mortgagees, receivers and liquidators.
Only 20 (3.7%) of new build flats were resold at a higher price with an average of +11%.


In the New Build flat sector, 82% of those sold in the auction rooms over the past 3 years have been known to be distressed. The drop of -26% between the Land Registry price and the subsequent auction sale price is as a result of a combination of factors. Many developers specifically tailored apartments to attract the Buy to Let market, with investors being offered incentives including cash refunds or guarantees initial rental returns. Lenders, keen to win market share, designed mortgages to appeal to investors, often offering high loan to value products at reduced initial rates of interest. With large numbers of units coming onto the market and with limited tenant availability, investors suffered voids almost immediately."

http://www.allsop.co.uk/uploads/File/RA ... 0Final.pdf

The number of Buy to Let mortgages increased by 27% in 2007