Four more years of negative equity

According to the National Housing Federation, families living the low-income lives are likely to be denied access to the market.

The NHF said that people who were unfortunate enough to buy property when the prices were at their highest might be confronted by the problem of spending four more years of being in negative equity.

The average price for a UK house in 2007 was £216,800.

It might take these borrowers four years of waiting until prices stabilize enough to make their property cost more than their mortgage.

In the intervening time, the data from the Bank of England demonstrate that the number of mortgage approvals remained practically unchanged in July.

The figures confirm information from loan providers and surveys according to which prices have achieved a relatively stable level after the revitalization that began in the first half of 2009.

If homeowners don’t plan to move home while being in negative equity, it is not catastrophical. However, if borrowers whose home has become worth less than the mortgage want to sell their house and move elsewhere, they will probably be prevented from doing so by their lenders.
 


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