Why Jeremy Hunt won’t save Britain from falling house prices

0
16

For first-time buyers who bought a home during the post-pandemic boom at the height of the market, the outlook is bleak. Sarah Glen, 40, bought her first home in 2017 and already has negative net worth. Mrs Glen, speaking under a pseudonym, bought a £257,500 flat in south London with a 5 per cent down payment. and an equity loan of 40 pc.

In April, she found that the value of her property had dropped 22 percent since she bought it. An identical flat below hers sold for £200,000 – almost £60,000 less than Mrs Glen paid.

ALSO READ  Herschel Walker's campaign is dead. What's next for the GOP football star?

The apartment building has no problems with facade cladding or leasehold. “The drop is because new builds sold with Help to Buy were so overpriced,” Ms Glen said.

She fell into negative equity even before the recent housing turmoil. A further 9 percent drop in house prices would put her in a disastrous situation when her fixed-rate mortgage expires in April 2024.

“If I had to take out a mortgage again right now, I wouldn’t be able to afford to stay in my property,” she said.

ALSO READ  FIFA faces a lawsuit over the ban on the OneLove bracelet in England

“I should rent it out and maybe move to a shared house. I bought this property on my own, I have no family to support. I am terrified of further house price falls.”

Nationally, values ​​are already falling. Monthly values ​​in October fell 0.9 percent, according to Nationwide Building Society. The index is based on home purchase mortgage approvals, meaning it is both more direct than the official data and more reflective of the impact of higher rates.

ALSO READ  Cristiano Ronaldo slammed by his own Portuguese coach for unacceptable reaction