Equity or lack thereof…

http://www.bbc.co.uk/news/business-14445857

Another report stating what most people know to be true, so I suppose it just confirms it.  A whopping third of the properties that have a mortgage on them are in negative equity!  It is not as bad as in the 90’s, they say, but how does knowing that help us today?  We, in the UK, do like to quote statistics – the coldest day since…. the hottest summer since…

I suppose the hope ( in pointing out a somewhat positive sounding statistic)  is that people do not panic and make rash decisions abut their future. That would seem to be a sensible idea.  Just because you are in negative equity or low equity does not mean you need to get rid of the property as you will be left holding the remains in the form of an unsecured loan that you have to pay back to the bank.  Also, be very wary of using an agent to sell your property if there is not much equity as their fees must be paid from the proceeds, again you could have to pay back the remains to the bank.

Another option for you, if you must sell due to various concerns such as relocation, job loss, redundancy etc is to rent out until values rise again?  This could give you a breather from the property while you wait to sell.  Of course, most people would rather not take tenants on, as that can be a job in itself but at least it can mean some or all of the mortgage is paid for you.  You could even take on a lodger to reduce your mortgage payments.

If you would rather not do this, then have a chat to me and I can give you options that end in you selling your property at an acceptable price ( Well I had to add that in 🙂 ).

http://www.dailymail.co.uk/news/article-2023803/The-830-000-homeowners-negative-equity-trap.html?ITO=1490

The Daily Mail also talks on this topic stating as well the dire state of the housing market for sales.  Estate agents seem to be only selling one property a week at the moment.  That sounds like a very slow market to me and who is to say when your turn will come around, especially if you can not reduce your price sufficiently.  In situations like this, other solutions must be looked into as the traditional ones are failing dismally.

http://www.ftadviser.com/FTAdviser/Mortgages/Lenders/News/article/20110808/74495cbc-c1ad-11e0-b8a0-00144f2af8e8/Most-borrowers-have-substantial-equity-cushion-CML.jsp

Anyway, to end on a positive note, 75% of mortgage borrowers according to the Financial Times, have on average around 30% equity.  So, it is not all bad for everyone.

 

 

 

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