Property News > The Return of Negative Equity

The Return of Negative Equity

The words 'negative equity' have not been heard much over the past ten years but back in the early 90s they were on the tip of everyone's tongue. Could it be that we've had it so good over the past decade that we've forgotten what true economic slowdown is all about?There are reports in the media this week that negative equity is - sadly - coming back into fashion. The banking giant, Citigroup, announced that 250,000 households in the UK are now facing the fact that their home is valued at a sum which is less than their mortgage. Citigroup calculate a drop of 7% in house prices over the last 9 months; although not a figure to which all lenders would agree, few would argue that we're in a downward trend that is bound to affect homeowners in the future. Estimates show that if house prices continue to fall one million households will be in negative equity by the end of 2009.Factors other than national economics are starting to take their toll: the rise in oil and petrol prices and the general increase in food prices worldwide. The Bank of England kept interest rates the same at their meeting last week and show little inclination to reduce them for fear that inflation in the UK will take off. The big mortgages that were made essential through rising house prices mean that any hike in interest rates, however small, is hard to bear. Many 'buy to let' mortgages are being pulled by lenders and borrowers without substantial deposits are frequently being turned away. The fact is that mortgages - especially cheap mortgages - are becoming as rare as the proverbial hens teeth, thus hitting the first time buyers and sending ripples upwards through the housing market as a whole. These factors combine to make a difficult housing market into an impossible one if you are trying to sell your home. Drive down almost any street and it isn't difficult to find 'for sale' boards, but seeking out those elusive 'sold' boards might take you rather longer.Selling your house may be a nightmare in the current climate, but it is still possible with the service provided by Property Rescue. The company guarantees to buy property of all types and in all locations, no matter what condition it is in. Their valuation is given without obligation and in complete confidence; it will be up to you whether you want to proceed and if you decide not to, no one will call nor will you be pressured into going ahead. If you are beginning to think you'll never sell your home, why not talk to Property Rescue. Their expert advisers are waiting for your call.The words 'negative equity' have not been heard much over the past ten years but back in the early 90s they were on the tip of everyone's tongue. Could it be that we've had it so good over the past decade that we've forgotten what true economic slowdown is all about?There are reports in the media this week that negative equity is - sadly - coming back into fashion. The banking giant, Citigroup, announced that 250,000 households in the UK are now facing the fact that their home is valued at a sum which is less than their mortgage. Citigroup calculate a drop of 7% in house prices over the last 9 months; although not a figure to which all lenders would agree, few would argue that we're in a downward trend that is bound to affect homeowners in the future. Estimates show that if house prices continue to fall one million households will be in negative equity by the end of 2009.Factors other than national economics are starting to take their toll: the rise in oil and petrol prices and the general increase in food prices worldwide. The Bank of England kept interest rates the same at their meeting last week and show little inclination to reduce them for fear that inflation in the UK will take off.The big mortgages that were made essential through rising house prices mean that any hike in interest rates, however small, is hard to bear. Many 'buy to let' mortgages are being pulled by lenders and borrowers without substantial deposits are frequently being turned away. The fact is that mortgages - especially cheap mortgages - are becoming as rare as the proverbial hens teeth, thus hitting the first time buyers and sending ripples upwards through the housing market as a whole.These factors combine to make a difficult housing market into an impossible one if you are trying to sell your home. Drive down almost any street and it isn't difficult to find 'for sale' boards, but seeking out those elusive 'sold' boards might take you rather longer.Selling your house may be a nightmare in the current climate, but it is still possible with the service provided by Property Rescue. The company guarantees to buy property of all types and in all locations, no matter what condition it is in. Their valuation is given without obligation and in complete confidence; it will be up to you whether you want to proceed and if you decide not to, no one will call nor will you be pressured into going ahead.If you are beginning to think you'll never sell your home, why not talk to Property Rescue. Their expert advisers are waiting for your call.

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