Belfast Telegraph

Time for MLAs to fix mortgages crisis

Editor's Viewpoint

The extent of negative equity in Northern Ireland is revealed in today's Belfast Telegraph with one in three houses now worth less than the mortgage taken out for it.

The situation is so bad that Northern Ireland is by far the worst affected region in the United Kingdom. Here our negative equity rate of some 35% is well over twice as much as the 15% in Yorkshire and Humberside, the next worst-off region.

For many homeowners the figure is hypothetical as they may not be moving but for others it is devastating. For example, one young single mother of two watched the value of her property fall by £25,000 only a week after she had signed the mortgage papers. Another family ended up owing their builder a large sum, even though their initial mortgage had been enough to cover the property. These stories, and others, illustrate the personal worries facing so many hard-working people.

This has led to a serious knock-on effect. Widespread negative equity has meant that people have difficulty selling their property, even if they want to, and this has led to the near-paralysis of the housing market. It has also dented consumer confidence as people are afraid to spend money when they feel their house is worth less than their mortgage.

In Northern Ireland the average house price peaked at £234,000 in 2007, but this has dropped to £139,000 last year. The only place worse off is the Republic where the steady demise of the Celtic Tiger has led to the house prices dropping by 50% since 2007. The big question facing everyone is how to help householders to escape from the negative equity trap. Much discussion about this has been taking place in the south.

While many initiatives have been mooted, few have been acted upon. However, at least there is a discussion taking place across the border which might be of benefit here. The problem will certainly not lessen if people are not prepared to begin a constructive discussion about it. Politicians of all hues need to address the issue as it will be vital to future recovery in our economy.

Belfast Telegraph


From Belfast Telegraph