|New Property Report Reveals Some Disturbing Home Truths|
Predicting 4 more years of negative equity for those who bought at the peak
Tens of thousands of homeowners who bought during the housing boom face another four years of being trapped in negative equity, according to a new forecast published today (Tuesday 31 August) by the National Housing Federation.
People who purchased a property in England at the peak of the market in 2007 paid an average price of £216,800. But they have been warned they will have to wait until 2014 – when average prices are predicted to hit £226,900 - before they recover what they paid for their home seven years earlier, according to the research
Homeowners who bought during the peak of the market in 2007 are likely to experience continued negative equity until 2014 – based on average house price figures for England.
The Federation, which represents England’s housing associations, said it feared an entire generation of people would be locked out of the housing market as a result of high house prices.
The new report – Home Truths 2010 - shows the country is in the midst of the worst housing crisis for generations.
• While demand is growing, supply of new housing is falling. In 2009/10 just 87,360 new homes were started in England, producing only enough homes for a third of the new households forming each year.
Federation chief executive David Orr said: "For those who bought at the peak of the housing boom, there's a strong possibility that they will have to wait another four years before their home is actually worth what they paid for it.
"There’s a very real risk that an entire generation will be locked out of the housing market for the foreseeable future and people will increasingly look to buy or rent an affordable home instead."
He continued, "Proposed caps on housing benefit payments could also put nearly a million people on low incomes at risk of losing their home – and further deepen the nation’s dire housing crisis.
September 1, 2010