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330,000 unlucky buyers face loss
Evening Standard6 Jan 2009
MORE than a third of a million homes in London are already worth less than their owners paid for them, analysis by the Evening Standard shows today.
The property market collapse has sent average values tumbling to about £270,000 - levels last seen in June 2006 - according to figures from the Halifax index.
Since then, 333,382 flats and houses have been bought in London, according to Land Registry figures, and the vast majority will have since lost value.
Although many of these will not have been bought with 90 per cent or 100 per cent mortgages, it is certain that tens of thousands of owners are already in negative equity.
Even those who bought with healthy amounts of equity will have seen huge chunks of their net worth wiped out, making them feel much worse off.
It is a huge culture shock after a decade and a half in which property prices tripled and Britons borrowed tens of billions of pounds a year against the rising value of their homes.
That trend has been thrown into reverse recently as panicking homeowners plough money back into their properties to avoid negative equity. Some forecasts suggest that the market will not bottom out until the end of March next year, dragging prices down to levels not seen since the spring of 2003.
In that situation, the number of London homes "in the red" would increase to more than three quarters of a million.
The Land Registry data shows 778,561 houses and flats have changed hands since spring 2003 - about a quarter of London's total privately owned housing stock.
Reader views (2)
I agree with Nu,it a long term investment. Speculators pushed the prices up beyond what most people could afford the bubble had to burst, UK housing had to come down. If you're in a house and can ride it out stick with it you don't lose anything until you sell, and whist interest rates are low make it a priority to get rid of as much mortgage as you can
- Irene Mcfarlane, Sydney, Australia, 07/01/2009 09:10
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oh for heaven's sake, grow up. if you buy a house or flat, you don't do it for a couple of months, you buy for the long term.
- Nu, london uk, 06/01/2009 16:38
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