The United Kingdom is showing signs of housing recovery
Jennifer McClelland | RSS | 3 Comments
The United Kingdom has had some new figures come out that show that there might be some recovery in the housing market in that country. The new figures that have come out show that the annual rate of the decline of housing prices has slowed down to 11.3% from 15%. Right now the average price for a home in the country is 154,016 pounds; the highest housing prices the country witnessed was 186,044 pounds on average and that was in October 2007; a 17% increase from the lowest point seen.
The problem with these prices is that not only did they happen so quickly, but the homeowners are having serious issues dealing with negative equity in their homes. Negative equity happens when the mortgage that the homeowner has on the house is worth more than the actual property is appraised for. This means that if the homeowner wants to move or sell their house, they will not get what they paid for it, and may end up owing the bank even when they don’t live in the house anymore.
Statistics that have been released from the Council of Mortgage Lenders showed that 900,000 homeowners are having problems with negative equity. The 900,000 homeowners equals to 5% of all the homeowners in the United Kingdom. However, of all homeowners in the country, there is around 2 trillion pounds of equity that hasn’t been mortgaged. Again, this figure means little to nothing to those struggling with negative equity in their own homes.
Right now, there is an improvement in the sales to house stock ratio due to fewer houses being listed through real estate agents. There are a few things that are coming together to help with the recovery. First of all, there aren’t as many homeowners that are willing to sell their houses when the property market is at the bottom. Secondly, there are fewer new homes coming up due to the higher risk that is associated by property investment. The National House-Building Council has sown that new property construction is down 53% since just last year.
Overall, it is nice to see some kind of improvement throughout the housing market, not only in the United States but also abroad. There will always be homeowners that overpay for their homes no matter if there is a recession or not. What these homeowners will have to do is hold on to their homes until the equity in the house builds up. Eventually, these homeowners will find themselves in the black.
Housing is becoming more affordable
The English population is expected to increase; housing will follow
Fifty percent of mortgages could be for more than the value of the house it covers by 2011
Tags: negative equity, real estate agents, new homes
micjor from carpro | Tue, Aug 11 2009
The problem with these prices is that not only did they happen so quickly, but the homeowners are having serious issues dealing with negative equity in their homes. Negative equity happens when the mortgage that the homeowner has on the house is worth more than the actual property is appraised for. This means that if the homeowner wants to move or sell their house, they will not get what they paid for it, and may end up owing the bank even when they don’t live in the house anymore.
Steven | Fri, Sep 04 2009
There may be some signs of a recovery in prices, but tranaction volumes are still very low. Mortgages are still harder to get, with most banks being overly cautious. Lets hope these “green shoots” do signal a longer term recovery
Ellen from Sterling VA Homes | Fri, Nov 27 2009
I really hope this is something that is a trend, and takes hold in the states also. Yes we have historic lows in mortgage rates, but no one is rushing to buy.