Sunday, Dec 14, 2008
Has anyone seen my equity?
Times: 10 years of house price gains could be wiped out
Millions of homeowners who have been climbing the property ladder since 1998 could find themselves unable to trade up by the end of this downturn, new figures show.
Exclusive research for The Sunday Times shows that those who bought ten years ago will be perilously close to the mortgage “danger zone”, which brokers say applies to anyone with less than 25% equity in their home. Mortgage deals have become more scarce for those with a deposit of under 25%.
Those who bought at the top of the market in 2003 will be deep in negative equity, owing 115% of the value of their home — a huge fall from the 17% equity they hold now.
Posted by little professor @ 02:03 PM (1183 views) Add Comment
12 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. it_is_going_with_a_bang said...
Unable to trade up? Thats funny because from where I was looking it was the obscene prices of housing that stopped anyone trading up.
My mistake.
2. ianbe said...
So they can't trade up if prices are too high and they won't be able to trade up if prices fall.
Mmmmm.
Could it be that they simply haven't paid off enough debt to build the equity they need for the next move.
The British public are going to need to learn that it isn't like it was for our parents generation in the 70s and 80s, when inflation (coupled with big nominal wage rises) eroded the debt and delivered big fat equity on a plate with no effort on their part.
No wonder they brow-beat their offspring into buying at any cost.
3. paul said...
Why isn't this The Times normal property correspondent's article?
Rosie Millard or Anne Ashworth for example?
(oh, because its bad news).
4. phdinbubbles said...
I'm very impressed (sarcasm) at the way they've managed to twist it to look like someone that bought in 1998 would have difficulty trading-up with a 25% crash. They seem to do this by saying that the same person will have bought every five years - so presumably they traded-up in 2003 and 2008 as well (or at least that's what it seems to me - unless I've mis-read it).
Dodgy back of a stamp calculation for someone that bought in 1998 and stayed put: They bought a £100k house with 90% deposit back in '98. So that house would probably have peaked at £300-350k in 2007 and after a 25% crash would make it (if they could find a buyer) worth approx £225-262k. Erm, so they've still made a big fat profit (minus the mortgage they took out and plus the bit they've paid back (and overpaid if they're prudent)) for doing nothing and have a rather large deposit to put down on a bigger, better house with the price differential being smaller because of the crash.
F*ckwits.
Was impressed by the bit about lending returning to normal as well......not.
5. phdinbubbles said...
Sorry - wrote that in a bit of a hurry - obviously should be 10% deposit, not 90%
6. drewster said...
What phdinbubbles says. The headline is highly misleading; anyone who bought in 1998 is fine, even with just an interest-only mortgage.
Interesting change in media spin though - before they twisted the figures to make them look more flattering, now they're sensationalising the downturn.
7. confused76 said...
"Those who bought at the top of the market in 2003 "
2003 peak!??!?
so what about who bought in August 2007????????
mawua hhah ahhahh
8. confused76 said...
"Those who bought at the top of the market in 2003 "
2003 peak!??!?
so what about who bought in August 2007????????
mawua hhah ahhahh
9. crash bandicoot said...
Ironically I bought my three-bed semi for £63k in1998. Over the years I have made my regular payments and a couple of overpayments. I now owe about £30k. I have been wanting to trade-up for the last 5 years, but high house prices have prevented me rather than helping me. I was rather hoping that prices fall back to at least 1998 levels, as then I'll have some equity, and will be able to afford the type of house that has been out of my reach for all of those years.
Some of these folks have had their understanding of affordability so warped by the past few years that they have lost touch with reality. When you borrow money, it is your work that pays it back, not the magic house price fairy.
10. This comment has been removed as it was found to be in breach of our Blog Policies.
11. This comment has been removed as it was found to be in breach of our Blog Policies.
12. This comment has been removed as it was found to be in breach of our Blog Policies.