Neg Eq - the numbers

vivatifosi

Fitch Ratings has been putting some data out on the numbers of people in the UK facing negative equity. Apologies if it has been covered already (have had a look and couldn't see thread re the actual numbers). Covered in brief in FT late last night and being picked up by news channels today. East Midlands is worst hit area. Here are some links:

FT maps showing affected areas:
http://www.ft.com/cms/69f9f736-5f5c-11de-93d1-00144feabdc0.jpg

Reuters feed article:
http://uk.reuters.com/article/idUKTRE55M1OE20090623

Guardian article:
http://www.guardian.co.uk/money/2009/jun/23/mortgages-negative-equity

purch

FT maps showing affected areas

Good. :T Keep it simple for us, much easier than trying to read and comprehend a load of text...:eek:

About 270,000 borrowers were in negative equity in Fitch's analysis, which included nearly 25 percent of all outstanding UK prime mortgages, the ratings agency said.

StevieJ

Northern Ireland 6.9%, staggered by that one , they are one of the best figures but I thought they would be the worst.

vivatifosi

StevieJ wrote: »

Northern Ireland 6.9%, staggered by that one , they are one of the best figures but I thought they would be the worst.

I agree and have been looking for reasons why. According to the University of Ulster House Price Index the volume of transactions fell back heavily while the market was still peaking, so the number of transactions in 2006 fell 5.1% over those in 2005, in 2007 they fell 19.2% over 2006 and in 2008 transactions were down 55.7% on 2007.

Here are a couple of sources:

http://www.cefni.co.uk/CEFWebclient/FCKeditor/UserFiles/file/HOUSING%20SEMINAR%20PRESENTATION%20FINAL.ppt.

http://news.ulster.ac.uk/releases/2008/3772.html

Gorgeous_George

I may be wrong but I think more people in the North rent their homes (from social housing) and more cash-rich people live in the South (not wishing to generalise too much!). If true, these will skew the figures

In the North East, negative equity is likely to be much smaller numbers (per borrower) than in London and the South as houses have always cost so much less up t'North.

It's grim down South.

GG

Lotus-eater

It's grim in Corby by the looks of it!

I thought the same about NI and did come up with the probable explanation that vivatifosi offered. Thanks for the link.

StevieJ

vivatifosi wrote: »

I agree and have been looking for reasons why. According to the University of Ulster House Price Index the volume of transactions fell back heavily while the market was still peaking, so the number of transactions in 2006 fell 5.1% over those in 2005, in 2007 they fell 19.2% over 2006 and in 2008 transactions were down 55.7% on 2007.

So they don't follow the rule mentioned by Generali and others that you need a set number of approvals to support increasing house prices, interesting.

vivatifosi

StevieJ wrote: »

So they don't follow the rule mentioned by Generali and others that you need a set number of approvals to support increasing house prices, interesting.

Now that I don't know Stevie. Without wishing to incur wrath from anyone from NI I always find NI stats a difficult comparison with the rest of the UK because the bodies compiling the data are different. Plus there are probably VI spin doctors around somewhere, thinking that its better to show house prices in NI rising than transaction volumes falling. Who knows?