Research by the Council of Mortgage Lenders released today provides a strong indication on the current state of negative equity faced by householders across the nation. The research carried out across seven million property mortgages, looked at the amounts outstanding between the first quarter of 2011 and first quarter of 2012.
It seems that the burden of negative equity is easing and in the last year has dropped by 13%.
It seems that the situation has improved, through property price rises, in some parts of the country such as London and the South East and the fact that borrowers appear to be paying off their mortgages. It found that the majority of homeowners are in a relatively comfortable equity position, but that the general equity position has been eroded since the heights of 2007.
Some 719,000 households still have negative equity, although for these householders, being in negative equity has been less of a problem compared to the recession and slump of the 1990’s.The high unemployment and high interest rate environment during this period resulted in many in financial difficulty being repossessed.
In contrast the low interest rates of recent years coupled with the much stricter rules preventing repossessions have seen much fewer borrowers losing their homes than experts had predicted.
Negative equity is worst in Northern Ireland where house prices have gone through a much sharper boom and bust than in the rest of the UK.