Buyers 'face years of negative equity'

By Martha Linden,Press Association
Sunday 23 October 2011 04:47

Homeowners who bought at the height of the housing market face another four years of negative equity, according to a forecast published today.

People who bought a property in England in 2007 will have to wait until 2014 before emerging from negative equity, according to the National Housing Federation.

Independent forecasts in the study Home Truths 2010 have indicated that people who bought at the height of the boom paid on average £216,800, and this will have risen to £226,900 by 2014. The report predicted a 22 per cent rise in house prices over a five-year period to 2014, fuelled by an under-supply of new housing.

In 2009-10, it said, work started on just 87,360 new homes in England, producing only enough homes for a third of the new households forming each year.

The federation fears that an "entire generation" of people would be locked out of the housing market as a result of high house prices.

It adds that the shortage of social housing will leave those shut out of the home ownership market with "little realistic chance" of obtaining a social home. More than 1.76 million households, the equivalent of 4.5 million people, were on social housing waiting lists in 2009, a 23 per cent increase in the last five years, according to its figures.

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