Real Estate Marketing & Beyond
According to a recent report in the UK tabloid, the Daily Mail, more homeowners in the north of the UK have loans which are underwater, or in negative equity, than in the South. Apparently, 3.6% of homeowners with a mortgage had fallen into negative equity by the spring of 2010, but by the end of 2011 this figure increased to 5.6%, with far more people in the North of England being affected than those living in the South.
UK housing stats show a big divide between north and south © yuriy - Fotolia.com
Real estate prices in the North have fallen substantially since the credit crunch began in 2007, but in contrast have reached record levels in some parts of the South East, in particular in London. Around 3.3% of homeowners in the South are estimated to be in negative equity compared to around 8.5% of homeowners in the North, but homeowners in the North-East have fared the worst.
Land Registry figures show average house prices in the North East reached a high of £129,402 in October 2007, but today these same homes are worth just £99,385 which is a massive 23% drop, and is nearly £30,000 less. It's estimated around 12% of homeowners in the North East now have loans which are underwater. In contrast the average price of a home in London is £354,300.
Since 2007 the percentage of homeowners who have less than 10% equity in their homes has increased from 13.5% to 16.6%. One of the problems facing these homeowners is the difficulty in remortgaging once their current deals come to an end, as banks and lenders are now asking for a minimum deposit of at least 20% in many cases, and penalize anyone with a lesser deposit by charging more interest.
The Council of Mortgage Lenders in the UK estimates 830,000 people have fallen into negative equity, but in 2005 this figure was negligible. However this figure is far lower than during the early 1990s when the numbers in negative equity reached 1.6 million.
