Falling land valueshit Royal investment

The Prince took out a 20m loan in 2007 to save historic Dumfries House in Ayrshire, with security for the deal being provided by land around the property.

The land was bought for 268,000 and was valued at 14.9m when prices were riding high. But as a result of the crash in land development prices, the value of the greenfield site has fallen to less than 9m, leaving the heir to the throne in the position of a homeowner in negative equity, according to a national newspaper.

The purchase of Dumfries House for 45m in 2007 was financed with the help of the loan taken out by the Prince’s Charities Foundation, which funds his 20 charities.

Charles wants to build a model community along the lines of Poundbury in Dorset as part of a regeneration project to boost business and employment opportunities in East Ayrshire.

The development is a long term project and the negative equity would only lead to a loss if the land was sold early.

In a statement, the Prince’s spokesman insisted the loan had not put any of his charities at risk. He said it had “involved, like any entrepreneurial activity, an element of risk, but the risks were manageable and fully covered”.

Returns on the property deal were already proving “substantial”, he added.

He said the purchase of the house, nearby land and the preservation of its collection of Chippendale furniture for future generations was only made possible with the foundation’s contribution.

“The loan taken out by the foundation in 2007 was fully disclosed at the time and has since been refinanced and partly paid off.

“The value of the land bought with the property has since declined – a reflection of a nationwide decline in property and land values which were not foreseen in 2007 – but there is no intention to sell the land.

“Quite the opposite. The land will be developed as part of a major regional heritage-led regeneration project which the Prince hopes will play an important part in creating much-needed business and employment opportunities in East Ayrshire for many years to come.”