Nightmare of Negative Equity
Thursday, 28 March, 2013
The original value of many properties is decreasing -“ making negative equity a very real problem for many property and home owners. Added to this -“ mortgage repayments are facing a higher rate than what the properties are worth. Half a million families are reported to have been affected in the UK “ as property owners have to make large repayments of debt which will inevitably outweigh the value of their homes.
The Financial Conduct Authority (FCA) have predicted that it is no short-term trend and that future house prices may continue to fall.
It has been reported that this economic crisis may have a knock on effect to first time buyers -“ who cannot get onto the property ladder due to the unavailability of property “ as current home owners become trapped in their home’s debt and are unable to move up the property ladder.
Further consequences may reach to job market -“ as individuals who wish to move for new job opportunities are restricted and cannot do so due to being trapped by their current circumstances relating to their property.
The recession is to blame for this market slump -“ according to many analysts “ as the performance of the property market before the recession made many people enter into homeownership thinking house prices could only go up. However, it seems this was a case of poor judgement, as increasing house prices seems to be an untenable dream at least within the foreseeable future -“ many unlucky homeowners are trapped in a market which is not financially viable for themselves