10% of homeowners in the East Midlands are in negative equity

With claims that house prices have been on the rise for over a year it may seem strange to see that in fact in the East Midlands the percentage of borrowers in negative equity is between 6-10%. This compares to just 1% of borrowers in London.

Overall 463,000 homeowners across the UK still have loans worth more than their houses are worth. This could be bad news for those homeowners when the interest rates are expected to rise in April 2015.

If you’re a homeowner in a similar situation and would like to find out your options contact us today.

London property distorting price rises

Although there has been a lot of talk about an increase in house prices across the UK during the 2013, when you look closely at the figures, it’s not all quite as rosy for everyone.

According to Land Registry if you are in the North East you will have seen a fall of 1.6%. Most of the driving force behind the price rises have been in the South East and London in particular.

These parts are already the highest within the UK with prices in London rising another 10.6% during the year. This has hugely impacted on the average figures for the rest of the UK. So while economists are pleased with the growth of the UK housing market, the reality hasn’t quite been noticed by the average homeowner in the midlands and above.

Dispatches investigation into estate agents

In case you didn’t get chance to see Channel 4’s ‘Dispatches – The Property Market Undercover’ program you can watch it here until the 28th November.

The program starts by showing that anyone can set up to be an estate agent within 48 hours with no qualifications. This shows the lack of regulation in the sector.

The Help to Buy scheme has been brought forward by the government in a bid to kick start the housing market and the wider economy. This should mean a greater number of mortgage applications being submitted. Most estate agents have ‘in house’ mortgage advisers who can search the market for you. In a lot of cases they are not always able to search the whole market which means you might be missing out on the most suitable mortgage for you. Sales advisers and negotiators are given incentives in order to get potential buyers to use their ‘in house’ mortgage lender. They do this by “prioritising offers” for those who use the in house services trying to force you to use their service, even if you already have your finance arranged. For the sellers they may also be losing out on prospective buyers because of it.

Some estate agents are also pressurising buyers saying that they will reject any other offers for a property if they are to use their in house services. Even if another buyer is in a better position for their client, the seller.

The lack of regulation means these dirty sales tactics will happen all at the detriment to both buyers and sellers of properties. There are many frustrated sellers on the market who have had little or no feedback from their estate agent. Maybe if their customer service was improved, estate agents would not have to use underhand techniques in order to sell properties.

Nationwide unsure about Help to Buy

The Nationwide building society has cut some mortgage interest rates for borrowers who are unable to raise a large deposit but they are still undecided whether they are going to join the government backed Help to Buy scheme which is set to launch in the new year.

The Help to Buy scheme is encouraging more transactions by lending up to 15% on a government backed loan to go towards the deposit for the property.

The building society’s new rate for a two-year fixed rate deal for a buyer offering a 10% deposit is 3.99%, with a £900 fee, or a £400 fee for first-time buyers. A number of lenders offer mortgages at this loan-to-value level.