Homeowners in Wealth Divide
Homeowners in Wealth Divide
When and where you bought your first house can have an impact on how wealthy you are now, reveals figures from the Council of Mortgage Lenders.
For those who purchased a house at the market’s peak in 2007 are now the most likely to be in negative equity. One in four who bought a house for the first time in this period now owe more than their property is worth.
This number is not level around the UK. Those with mortgages in the South East are less likely to be in negative equity, while those in Northern Ireland have been hit the hardest by the recession.
Just 5% of people who bought a house since 2005 in the South East are in negative equity, whereas in Northern Ireland the figure is much higher at 35%. Across the country, about 10% of people who have bought a home after 2005, and around 20% of those who purchased their first house in this time are in negative equity.
Generally, the amount of people in negative equity is dropping. Since quarter 1 (Q1) of 2011, the number of homeowners in negative equity has decreased by about 13%. It is believed that 719,000 households are in some kind of negative equity.
Negative equity is a substantial issue in the housing sector, although it is declining. It is also less of a problem now than it was in the recession of the 90s. In that time, interest rates were high and many could not keep up their repayments and were not able to sell because of negative equity.