Figures published today by Countrywide Estate Agents, and reported by The Guardian, have shown that the number of homeowners suffering from negative equity has fallen dramatically. Except, that is, in the north of England, where many remain trapped by their mortgages.
The figures would seem to add further evidence of Britain’s economic recovery at a time when many indicators show growth is outstripping comparable economies in both Europe and the United States. The figures are based on those homeowners who bought their first property in 2007 and are down from a high, nationally, of 60% in 2008 to just 6% today. This means that just 22,000 out of the 364,000 homes bought by first-time buyers in 2007 are still suffering from negative equity.
Financial services director at Countrywide, Nigel Stockton, told The Guardian that “Despite the largest fall in house prices for 25 years, across most of the country the number of first-time buyers who bought at the peak of the market and still find themselves in negative equity is low, which is good news.”
However, the news for the north is considerably bleaker. Stockton went on to say, “in parts of northern England the story is different. While the number of homeowners in negative equity is falling, it is doing so at a much slower pace when compared to the south of the country.”
Whilst the number of homeowners trapped in negative equity in London is lower than 1%, the figures are more worrying further north. In the North-East, more than half of all homes purchased in 2007 are still worth less than the mortgage used to buy them. In Yorkshire and Humber, 29% of 30,000 homes are similarly afflicted.
Nationally then, there is cause for celebration; however, little of the recovery is extending beyond the south and, it seems, it will be a little longer before house prices in the north are anything other than grim.