House Prices Fell in Past Year Robbing Homeowners of Equity in their Homes
House prices have fallen over the past year and home owners have had to watch as their hard earned equity disappeared. As house prices fell in areas the property values did as well and the homeowners lost the value in their property that boosted the level of their equity. The prices have fallen so much since the credit crisis that many homeowners have been pushed into negative equity making the possibility of securing a remortgage deal impossible for them.
The overall average house cost at the end of 2011 was £160,384 which amounted to a decrease of 1.3 per cent according to the Land Registry data. London has experienced an especially strong housing market and that was the only region within England and Wales that saw an increase. The increase of 2.8 per cent for 2011 helped offset the decrease of the other regions.
Peter Rollings, chief executive officer of estate agent Marsh & Parsons remarked “Stagnant house prices in December and falling transactions capped a fairly dismal year for the national housing market. Economic uncertainty and fears over job losses have reined in home moves in many parts of the country, and undermined prices outside London.
“Mortgage lending has been steadily improving as lenders learn to operate in a more constrained financial environment, and for those with deposits, rates are actually cheaper than a year ago in many cases. With the stamp duty holiday set to expire in less than two months, activity should pick up in the short term as determined first time buyers hurry to complete.”
The stamp duty holiday is due to end in March and there has been an increase in the number of first time buyers coming out to buy a home. This increase will give some boost to the housing market but only with a constant growth of buyers returning to the market will homeowners be able to benefit from equity growth due to rising house prices.