Saturday, Jun 13, 2009
Negative equity musings from firstrung
Firstrung editors blog: UK house prices; over one million in negative equity
"Well, well, well...the first bit of 'bad' housing market news (for a while) hit the newswires this morning. True to form (as I type) only 13 news organisations, 14 including ourselves, have bothered to cover this study. The BOE have stated that up to eleven percent of mortgage holders, or just over 1.1million mortgagees may be under-water, or as we call it in the UK in negative equity... " I found the overall tone of this article is surprisingly bearish and bitter.
Posted by quiet guy @ 02:30 PM (530 views) Add Comment
1 Comment
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1. uncle tom said...
There is a big difference (£100bn+) between the CML's figure for mortgage debt and the BOE's figure for debt secured on residential property, the difference being down to the likes of Ocean finance..
As secured finance is essentially a mortgage by another name, it is appropriate to lump the two together when working out the number of people in negative equity.
Re-working my own calculations, I conclude that there are currently:
1.8m households in negative equity, thereby virtually unable to move or sell.
plus
1.0m households with less than 10% equity, making it difficult to move to a similar value property
plus
0.4m households who have too little equity to upsize significantly while maintaining a 10% deposit
Of all outstanding mortgages, two thirds of them account for 90% of the outstanding debt.
At the other end of the scale, there are about 750,000 households who have more than 94% equity, and nearly a million mortgages that have less than £10,000 left to pay off.