We hear a lot about the problems facing first time buyers, but spare a thought for those who bought their property at the height of the housing market boom.
HSBC recently revealed that people who purchased their first home in 2007 have since seen the value of the property decrease by an average of £11,000.
More than 350,000 people are now believed to be trapped in their property because of falling house prices. Some unlucky buyers now find themselves in negative equity as the home is worth less than the value of their contractor mortgage. Others cannot move to a larger property because of the high costs associated with moving home.
People who bought their first home in Northern Ireland in 2007 have been worst hit. Their homes have reduced in value by a massive 42%, leaving them with an average negative equity of £45,000. In fact, the only UK region that has seen a rise in the value of first timer properties since 2007 is London and that increase is only 1.7%.
House prices continued their downward slide in September, decreasing 0.7% on the previous month.
Despite lower house prices, few first time buyers are benefitting. There are some very attractive mortgage rates about but mortgage lending institutions are still demanding large deposits, putting home ownership just out of reach.
At the same time, rental costs are soaring as demand outstrips supply, and prospective first time buyers find themselves dipping into their deposit savings to cope with the rising cost of living.
Howard Archer from HIS Global Insight predicts that house prices will have dropped by 5% by the middle of next summer due to the weak economy and low consumer confidence.
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