Surely I am not the only landlord worried about new EPC requirements?9:44 AM, 17th February 2021
About A week ago 115
New research from mortgage lenders reveals negative equity black spots across the UK.
Around 827,000 homes were in negative equity during the first three months of 2011, according to the Council of Mortgage Lenders (CML).
The worst regions for negative equity, mainly because house prices have suffered more than in other regions, are Yorkshire, Humberside and the North East.
The current downturn in property prices is not as bad as 1990s, when negative equity hit a peak affecting 1.6 million homes.
The figures are also improving – the last survey in 2009 disclosed around 900,000 homes were in negative equity, with 66% of homes worth up to £10,000 more than their mortgage debt. The statistics cover buy to let as well as private home ownership.
The current findings show negative equity today is about the same as 2008.
CML director general Paul Smee said: “Negative equity is much less common than in the 1990s, and in the current cycle low interest rates and a relatively stable employment market are providing more options for borrowers and lenders in difficulty.
“There is no direct relationship between negative equity and mortgage payment problems. What typically causes difficulty for households is not a nominal fall in housing value but an unexpected change in personal circumstances, like the loss of a job or the breakdown of a family relationship.”
The research also showed home owners hold around £800 million of equity in their property – while the average loan-to-value ratio on mortgaged property in the UK is less than 60%.
Even factoring in the fall in house price values, most borrowers still have a substantial equity in their homes.
Around half have mortgage debt equivalent to less than 70% of their home’s value, while another 25% have an equity cushion of between 10% and 30% of the property’s value.
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