View more on these topics

Thousands set to be in negative equity until 2014

Thousands of homeowners who bought during the housing boom face another four years of being trapped in negative equity, according to the National Housing Federation.

Homeowners who purchased property in the peak of the market in 2007 paid an average price of £216,800. But these people will have to wait until around 2014 – when average prices are predicted to hit £226,900 – before they recover what they paid for their homes at the time.

Independent economists Oxford Economics forecast house prices would increase 22 per cent over the next five years, fuelled by an under supply of new housing.

According to the research, house prices will rise 7.5 per cent this year, but will then fall again in 2011 by 3 per cent, before recording a modest increase of 0.9 per cent in 2012. It says house prices will then increase by 4 per cent in 2013 and 5.4 per cent in 2014.

Federation chief executive David Orr said: “For those who bought at the peak of the housing boom, there’s a strong possibility that they will have to wait another four years before their home is actually worth what they paid for it.

“But house prices will inevitably increase in the long term because of huge under-supply of housing. Even though price rises look sluggish for the next few years, affordability is not improving for many low-to-middle income households – as banks continue to restrict their mortgage lending and house prices remain historically expensive in relation to salaries.

“There’s a very real risk that an entire generation will be locked out of the housing market for the foreseeable future and people will increasingly look to buy or rent an affordable home instead.”

Recommended

Watchdog staff need knowledge to judge us

I have been banging on for years about the lack of qualifications of those who seek to judge what I and my fellow professionals do in our daily lives in dealing with clients. Alan Lakey’s comment in Money Marketing exemplifies the overpaid (£2.061m) internal staff costs and under-qualification (£643,000 in consultancy fees) that will result […]

Opportunities rise for event-driven managers

Fund of hedge fund managers International Asset Management and LGT Capital Partners are seeing an increase in opportunities for event-driven managers. IAM has a neutral view of returns from these strategies, which it sees as medium risk. It says merger arbitrage deals have provided steady returns for event-driven managers who are able to benefit from […]

3

Duel pricing

Before you stop reading this, thinking what is the point of reading a column written by some idiot who cannot even spell, bear with me. Some brokers feel lenders are dual-pricing to kill them off, hence the title of this column. In the boom times, brokers’ positions were unassailable. Lenders desperate for market share could […]

Morgan Stanley takes a Dip

Morgan Stanley’s defensive income plan is designed in response to investors demand for an income product that provides full capital protection regardless of index performance.

Five reasons for optimism in India

By Kunal Desai, Head of Indian Equities at Neptune Investment Management Following the MSCI India Index’s 26.4 per cent return in 2014, stemming from a 7.3 per cent rise in GDP, investors have recently become increasingly concerned about India’s future growth potential. What has happened to India’s reform agenda and are there any signs of […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment