House price falls now “widespread”
House prices are now falling in areas across the country, according to the latest report from the Royal Institute of Chartered Surveyors (RICS).
According to the report, nationally house prices remained flat while London, the South East, East Anglia and the North East of England all recorded falls.
London has already seen house prices fall in recent months due to earlier rises leaving many people priced out of the market, but the latest figures suggest the housing market may be weakening across the country.
The decline in property values will be especially worrying for homeowners in the North East, where prices in many areas still haven’t recovered from the crash ten years ago, leaving many mortgage borrowers trapped in negative equity.
A majority of surveyors who contributed to the RICS report are also predicting further falls in prices to come, with the South West and the West Midlands identified as being at risk in addition to those areas already seeing values declining.
The Bank of England’s decision to raise interest rates for the first time in ten years is seen as one of the main reasons why the housing market is struggling.
Around 4 million mortgage holders will see their repayments increase as a result of the Bank’s decision to increase rates from .025% to 0.5%.
Simon Rubinsohn, chief economist at RICS, said; “The combination of the increased cost of moving, a lack of fresh stock coming to the market, uncertainly over the political climate and now an interest rate hike appears to be taking its toll on activity in the housing market.
“A stagnant second hand market is bad news for the wider economy, not just in terms of spending, but also because it restricts mobility.”
How we can help
Falling house prices will leave many homeowners with outstanding mortgage debt worried about negative equity.
Negative equity describes a situation where the value of a property is less than the amount still owed on the mortgage on that property. This can make it impossible for people to sell their property if they need to move on, or if their repayments become unaffordable, as the sale of the house will not raise enough to pay off the remaining debt, leaving the borrower still owing the shortfall.
At Negative Equity UK, we offer bespoke solutions to help our clients deal with their property debt.
If you are worried about the impact the rise in interest rates will have on your finances, take a look at our reviews and contact us on 0161 631 2727 or online at negativeequityuk.com to arrange an initial free, no obligation consultation.