Hundreds Of Thousands Trapped In Negative Equity Due To Where They Live

Homeowners in the north of England remain stuck with homes worth less than the value of their mortgage while London property prices surge ahead.

According to the latest analysis by online estate agent House Simple, British homeowners are slowly escaping the mass negative equity that followed the 2008 economic crash. As Alex Gosling, House Simple’s chief executive puts it, “there is light at the end of the tunnel with prices now climbing across the country, and that should help bring many more homeowners out of negative equity”.

North/South Divide

There is however a vast disparity in how quickly different regions are returning to their pre-crash heights. If you have owned a property in London between 2007 and February 2016, you will have enjoyed a rise in the average value of a property of 56%. Owners in the north of England have not been as lucky, with the area home to 17 out of the 20 towns and cities worst affected by the crash that are now facing the longest roads to recovery. The north west of England contributes 40% of the 20 areas with the highest rates of negative equity.

In total, 75 towns and cities were analysed, reporting the percentage change in the value of the average house from 2007 to February 2016. Of these, 53% where found to have current prices still lower than in 2007.

Blackpool and Middlesbrough performed the worst overall with current house prices nearly 30% below their 2007 mark. Alex Gosling admitted “it’s going to take some time” for these areas to “come close” to their previous worth.

Top 20 Performing Towns and Cities In The Housing Market

Town/City Region Average Prices in 2007 (£) Average Price in February 2016 (£) % Difference between 2007 and February 2016 Prices
1 London London 339,511 530,368 56.20
2 Winchester South East 310,089 447,046 44.20
3 Stevenage East Anglia 207,765 289,265 39.20
4 Warwick West Midlands 200,546 278,396 38.80
5 Bedford East Anglia 190,938 256,282 34.20
6 Brighton South East 223,378 298,653 33.70
7 Bath South West 314,896 412,211 30.90
8 Slough South East 181,994 236,023 29.70
9 Reading South East 208,364 270,002 29.60
10 Sale North West 202,452 252,203 24.60
11 Oxford South East 242,896 300,717 23.80
12 Bristol South West 181,588 223,688 23.20
13 Canterbury South East 217,992 266,621 22.30
14 Eastbourne South East 208,170 254,585 22.30
15 Stockport North West 169,813 206,368 21.50
16 Worcester West Midlands 177,492 208,620 17.50
17 Milton Keynes South East 171,861 201,081 17.00
18 Cambridge East Anglia 191,331 223,837 17.00
19 Colchester East Anglia 200,740 234,680 16.90
20 Luton East Anglia 145,595 169,184 16.20

Sale and Stockport are the only towns outside the south of England to make it into the top 20, seeing 25% and 22% rises respectively.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.