An unspeakable amount of homeowners will be stagnating in negative equity status fro a few years, says a leading property organisation. The finances of homeowners have not only been battered by the recession, but now their property is suffering.

When the housing bubble was at its fullest about 3 years ago, England residents were paying an average of 217,000 pounds per house. This estimate is provided by the National Housing Federation. Because of less demand and subsequent decreases in home values, forecasts now suggest that it well be 2014 before homeowners recover what they originally paid for their home.

The financial crisis has also affected the building market. Fewer houses are bing put up today than in any period dating back to 1923. During the year of 2009 to 2010 about 87,000 homes were built, which would only house about 1/3 of the new households formed for the year.

The shortage of homes keeps demand at an elevated level, which has increased the property prices in the last few years. Although a forecast by Oxford Economics claims house prices will drop by around 3 per cent next year as the spending cuts in public services take effect.

The true ingredient to having healthy housing market remains the first time buyer. This group of home buyers is constantly encountering road blocks, as down payments have risen far above the pre-crisis 10 per cent.

As the base rate remains at 0.5 per cent for yet another month, it is a prime time for new home owners to enter the market. This will be difficult, due to the new regulations being enforced by banks. They are now requiring upwards of 25 per cent or more down payment, just to be considered for a mortgage.

Confidence about the economy has seen a boost , yet personal belief in finances of the home remains depressed.