Property Price drop accelerates

Property price drop has accelerated
By PA News
September 02 2008
Government help for homebuyers follows 12 months which have seen prices tumble and loans restricted.

- The average UK property has lost 10.5% of its value during the past 12 months, the biggest drop since the final quarter of 1990, according to Nationwide Building Society.

- Property prices fell by 1.9% in August following drops of 1.5% and 0.9% in July and June respectively.

- The average property in the UK currently costs £164,654.

- London house prices dropped by 5.3% in the last month, a report by property agent Rightmove showed.

- The top five worst affected areas in London, when comparing July to August, were Wandsworth, Brent, Kingston upon Thames, Richmond upon Thames and Greenwich.

- Property firm Savills said profits in its estate agency slumped 88% during the first half of this year.

- Buyers are currently putting down average deposits of 20%, falling to around 10% among first-time buyers, according to the Council of Mortgage Lenders.

- Figures show that 144,400 first-time buyers got on the property ladder between August last year and the beginning of this year, and many of these could now find themselves in negative equity.

- Around 552,000 people bought a property with a 100% mortgage between the beginning of August last year and the end of March, meaning they have no equity cushion against house price falls.

- The Halifax estimate 300,000 first-time buyers entered the market in 2007, the lowest since 1980. This compares with an estimated 900,000 at the peak in 1988.

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Are you about to become NEGATIVE?

Negative Equity To Hit 1.7m UK Homeowners?

Wednesday 30th July 2008

One in seven UK homeowners may face the threat of negative equity throughout the next year as the UK housing market takes a stranglehold, according to a report conducted by Standard & Poor..
The world’s largest credit rating agency’s findings suggest that around 70,000 of the UK’s 12m borrowers currently find themselves in negative equity mainly due to house prices falling in value at an alarming 26%, leading to a further 14% of homeowners slipping into negative equity due to their outstanding mortgages.


Such depressing figures could replicate the dark days of the 1990’s housing crash, where huge numbers of home owners were left financially crippled due to house price declines. Never has establishing the best financial mortgage package been so imperative.
The 70,000 predicted to suffer is already a far larger sum than first envisaged and this figure is expected to rise further with the news that the house price slump has upped its speed, falling 9% on last year, judged on S&P’s Nationwide and Halifax figures.
The ratings agency calculated that for with every percentage point drop in house price from now on, around 60,000 to 80,000 borrowers could realistically enter the dreaded realms of negative equity, with the high loan-to-value mortgages most at threat.
While Standard & Poor’s report agreed that prices are currently heading in a downward direction, with a further 17% fall forecasted, many experts predict a more optimistic outlook with many home owners taking up a mortgage worth more than 90% of the value of their home, allowing the chances of going into negative equity slim, even if house prices fell a realistic 10%.
The report declared, “The current run of house price declines raises the prospect of negative equity for a large number of homeowners, a situation not seen since the 1990’s house price recession.”