£50,000 off the Average Home Price

As the housing market slumps, £50,000 is predicted to fall of the price of the average home.

Although this predicted slump is going to give some people the chance to get onto the property ladder, it is also going to put 1 in 7 into negative equity.

According to researchers, 70,000 mortgage holders already owe more on their home is worth after house prices have fallen by nearly 10% and are forecast to fall by a further 17%, or £30,000, by April of next year.  This is set to plunge a further 1.7 million borrowers into negative equity.

With these decreases forecast, the average cost of a house will fall from £199,000 to £150,000 and with every percentage drop it is said that between 60,000 and 180,000 homeowners will fall into negative equity.

As the price on utilities, fuel and mortgages continues to rise, more people could fall behind with home loan payments and so many may be forced to sell their properties at a loss.

The predicted 17% drop in house prices is set to push the average mortgage of those in negative equity up by 108% of the value of the property, so the case for many will either be to ride things out or sell and loose money.

Lloyds TSB have confirmed that there has been a 70 per cent drop in their first half pre-tax profits, which is mainly down to the fact that the number of mortgages in arrears by 3 or more months has risen by 3%.

Those who do not have a good credit history are more likely than others to fall into negative equity as they are more likely to have bought their homes with a small deposit.

While sharper house prices are predicted by some, perhaps there is a glimmer of hope as mortgage rates are said to be falling.  Hopefully this will be in time to get some out of trouble and feeling more ‘positive’.