Region avoids negative equity

EAST Anglia continues to weather the housing storm with fewer households in negative equity than elsewhere in the UK.

EAST Anglia continues to weather the housing storm with fewer households in negative equity than elsewhere in the UK.

Only one in 100 homeowners in the region is thought to live in properties with a value less than their mortgage debt at the end of 2008.

This equates to about 0.9 percent of homeowners, compared to the national average of 5.2 percent.

New research by The Council of Mortgage Lenders (CML) suggests around a million home owners nationwide are thought to be in negative equity as house prices continue to drop.

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However East Anglia, which suffered badly in the last housing market recession in the 1990s, has remained relatively unscathed.

One reason suggested by the CML could be the fact house prices in the region started to fall later than the national average.

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Suffolk estate agent, James Girling, from Colin Girling and Co, said people needed to remain positive about negative equity.

“It isn't a problem unless you are looking to sell your house.”

He said: “I think the mortgage companies can start to be a bit more forgiving.

“For example if your house is worth �150,000 and you have a mortgage for �170,000 but you need to move to a bigger house because of an extra child, there wouldn't be much problem with that addition being carried on to your new property.

“The chances are if you weather the storm the value of your house will increase again.”

In general, he added: “There has been a 20 per cent drop in property prices in the last year to 18 months but I do think confidence is returning to the market.

“Prices seem to have stabilised over the last two weeks.”

Charlie Wright, partner at Fenn Wright Estate Agents, added: “One of the reasons for the few homes in negative equity is the few homes actually coming onto the market.”

Nationally the number in negative equity may have risen as high as 1.18 million by the end of February, the CML said.

The number could be heading towards the 1.5 million households estimated to have found themselves in negative equity at the depth of the last housing market recession in 1993.

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