Tens of thousands trapped in negative equity until 2014

| August 31, 2010 | 1 Comment

Tens of thousands of homeowners who bought during the housing boom face another four years of being trapped in negative equity.

According to a new forecast from the National Housing Federation (NHF), those who purchased a property in England at the peak of the market in 2007 paid an average price of £216,800.

They may therefore have to wait until 2014, when the average value of a home is expected to hit £226,900, before regaining a stake in their properties.

The prediction is based on an analysis by Oxford Economics, which puts house price inflation in England at 22% over the next five years.

According to the independent researcher, house prices will rise 7.5% in 2010 but will then fall again in 2011 by 3%, before recording a modest increase of 0.9% in 2012.

A rise of 4% is expected in 2013, followed by 5.4% in 2014 and 4.9% in 2015.

In addition, the Federation, which represents England’s housing associations, is fearful that an entire generation of people will be locked out of the housing market as a result of a shortage of stock.

The body’s new report “Home Truths 2010″ shows that while demand is growing, supply of new housing is falling.

NHF figures show that in 2009/10 just 87,360 new homes were started in England, producing only enough homes for a third of the new households forming each year.

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  1. Chris says:

    This is such a big concern for me. You have so many people in negative equity, bankrupt or simply put off buying property due to what has happened the passed few years that it will take the UK years to recover. Negative equity will prevent many people from even considering moving any time soon.

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