National Housing Federation warns on negative equity

The National Housing Federation has today issued a report which suggests that those who acquired their properties at the height of the property boom in 2007 will experience negative equity until 2014. Those who bought their properties at the peak of the property boom would have paid around an average price of £216,800 and with property prices unlikely to rise this year it could be 2014/15 before they are able to recoup their initial outlay.

As we suggested in one of our articles yesterday there is potential for long-term recovery in the UK property market purely and simply because the number of new homes built in the UK is running at around third of that required to support the growing population and the increasing number of households in the UK. So while the UK property market may look very difficult at the moment it does seem almost inevitable that, if only due to a shortage of properties, demand will eventually push prices higher and higher.

Whether this will prompt the coalition government, and other governments in the future, to increase the number of new properties built in the UK remains to be seen because ultimately this particular strategy, although not mentioned by the authorities, has been in place for many decades.