New research from Nationwide has revealed that house prices in the North East of England are still 9% lower than they were in 2007, just before the market crashed, leaving many homeowners trapped in negative equity.
Ten years on from the last recession, a large gap has opened up in regional house prices across the UK, with some areas struggling to regain lost ground and other areas, such as London, seeing growth falter as they reach the limits of affordability.
The research also shows that housing transactions have also failed to recover. In the ten years before the crash, house sales averaged 1.65 million per year, before they plummeted to just 730,000 in the year to June 2009.
Since then they have failed to reach their pre-crash levels and have passed 1.3 million only once.
Savills are predicting that there will be no return to higher growth in house prices for the foreseeable future and that an increase in interest rates could prove to be a tipping point when monthly repayments become unaffordable for many borrowers.
According to Lucien Cook of Savills; “House price growth is slowing and lead indicators suggest that market activity will weaken. During the next two years, sentiment looks set to be the main determinant of the market. However, as the uncertainty gradually starts to clear, we can be sure that the fundamentals will come back into play.”
This is all potentially very bad news for homeowners in negative equity as their properties are not regaining the value they lost when prices fell and who could find themselves unable to meet their monthly repayments when interest rates go up.
If you’re a homeowner whose property is in Negative Equity, or if you’re worried about the affordability of your mortgage, contact Negative Equity UK for a consultation and find out how we can help you with your property debt.
Call 0161 631 2727 or go online to negativeequityuk.com.