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Negative Equity Plagues Buy to Let Property

Negative Equity Plagues Buy to Let Property

Due to falling house prices, a newly published report has suggested that landowners who purchased buy to let properties during the peak of 2007, may be stuck in the unfortunate position of negative equity for at least four more years. The National Housing Federation (NHF) published these forecasted numbers. The news is troubling to only those landlords who are planning to sell their property soon. Of course, other let property owners would not be affected. Although many analysts dispute house prices increasing by the end of this year, Oxford Economics published a report suggesting house prices in the UK will grow by 22 per cent starting this year, and into the next five to six years. They are expecting prices to increase at least 7.5 per cent by the end of 2010. After this year they expect the market to see a decline in 2011 to the tune of about 3 cent.

Growth, they have predicted, will be back again in 2012, equaling about 4 per cent.

The NHF is continuing to emphasize that even though housing prices have plummeted, the ability to purchase homes has dropped off the table as well. With unemployment increasing and continuing to increase with the public sector job cuts coming, and banks requiring such high down payments, few people are able to grab on to the lower priced property ladder.

The encouraging news for landlords who are letting property is the higher LTV mortgages which are available right now.

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