A developer has "pulled the plug" on plans to create apartments in one of Bradford's least-loved buildings amid fears over the stability of the city centre property market.

JM Construction had wanted to buy High Point, once the headquarters of the Yorkshire Building Society, to convert into flats in a multi-million pound facelift for the concrete-clad office block.

But John Mulleady, managing director of JM Construction, today revealed his Morley company had pulled out of a deal with the building's owner, Manoj Aggarwal, because the apartment market in Bradford had "died a death".

Mr Mulleady's viewpoint has been hotly disputed by other developers and agents, although one city living specialist admitted that some apartment prices had fallen by up to 20 per cent as first-time investors panicked in the face of the Northern Rock crisis and the global credit crunch.

In 2005, the Telegraph & Argus revealed how Mr Aggarwal, a Manchester property developer, wanted to give the 1970s tower block an updated exterior as part of plans to create apartments, offices and shops.

Mr Mulleady said: "We had intended to buy it for apartments and were ready to go but, with the market in Bradford the way it is, it's too risky for me because apartments have died a death. The market slowed down just before Christmas, not just in Bradford but all over, and people are hanging on to see if there is going to be a recession.

"The last thing I need is 100 apartments that I can't sell," added Mr Mulleady, whose company is also involved in apartment projects at Midland Mills, in Manningham, and Thompson Mills, off Thornton Road, Bradford.

More than 1,700 over-stretched homeowners in the Bradford district were taken to court by lenders seeking repossession last year - an 18 per cent rise compared with 2006.

One example is at a complex in Byron Street, Bradford, where a luxury two-bedroom penthouse apartment has been repossessed and put back on the market for £124,950.

But Mani Waheed, managing director of Bradford property company Squarefoot Apartments, said: "Repossessions happen all over the UK and this is not due to the fact that Bradford's regeneration is slower than we would like, it is due to individual circumstances.

"Apartment prices in Bradford city centre are not falling. The prices are steady and holding values. From an investor point of view the Bradford rents are moving up, so rent payments are covering mortgage payments."

Asghar Ali, managing director of Bradford-based city living specialist Smart Moves, said: "I would not say the market was buoyant, but it's still safe money in the sense that there's lots of growth potential in Bradford."

Mr Ali said examples of large drops in some prices were driven by a small minority of first-time investors who had panicked and sold £100,000 apartments for up to £20,000 less than their "real values".

Meanwhile, Asquith Properties, the company behind the Gatehaus scheme and the 38-storey Citygate complex, in Manchester Road, said the location and quality of developments would keep property prices buoyant, adding that sale and rental values in Bradford outstripped the West Yorkshire average last year.

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