You are here: Home - Mortgages - First Time Buyer - News -

Northern homeowners face more years of negative equity

Written by:
More than half of first-time buyers in the North East who purchased a property in 2007 are still in negative equity with the situation unlikely to change any time soon.

Figures from estate agency Countrywide show across the UK around 6 per cent of first-time buyers who purchased a home in 2007 remain in negative equity.

This means 22,000 first-time buyers are trapped in a house worth less than the value of the loan.

However, the 6 per cent figure is down on the 15 per cent level recorded a year ago.

Figures vary across the country with 53 per cent of first-time buyers in the North East remaining in negative equity. In addition many households technically no longer in negative equity still hold equity of less than 5 per cent.

The firm said these figures mean borrowers will still find it difficult to climb the housing ladder.

Nigel Stockton, financial services director at Countrywide, said: “Despite the largest fall in house prices for 25 years, across most of the country the number of first-time buyers who bought at the peak of the market and still find themselves in negative equity is low, which is good news. For the average household in southern England homeownership has proved to be a solid investment even over a period where house prices have fallen.”

Stockton said it could be a further five years before house prices in the North East recovered.

“In parts of northern England the story is different and a significant number of first-time buyers still find themselves in negative equity,” he said.

“While the number of homeowners in negative equity is falling, it is doing so at a much slower pace than compared to the south of the country, with negative equity reduced though mortgage repayments rather than house price growth. If the current trend continues it could be five years before negative equity loosens its grip on first time sellers in parts of Northern England.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • Discover how your pension can be used to make a range of investments with attractive tax advantages. By…
  • RT @Defaqto: Looking for your first job? We outline our top tips for understanding and improving your credit score. Take a look @YourMoney
  • @YourMoneyUK Biased. People don't look at this stuff rationally. They also would not buy annuities if there ware decent alternatives.

Read previous post:
UK economy grows by 0.8% in quarter one

The UK economy expanded by 0.8 per cent in the first quarter of the year, slightly below economists' expectations.