Ulster one of two UK regions retaining negative equity fears

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Northern Ireland and the North East of England are the only areas of the UK where the danger of tipping into negative equity are still seen as a major concern, a report has found.

More people are now concerned about surging house prices than being stuck in negative equity in 10 out of 12 regions across the UK as fears about homes becoming unaffordable spread across the country, a report has found.

Consumer group the HomeOwners Alliance, which campaigns for property owners and people trying to get on the housing ladder, said its research shows that worries over high house prices amid a scarcity of homes for people to choose from have become a “national issue”.

The group’s report, which surveyed more than 2,500 people, including homeowners and people who do not own a property, found that it is not just London or the South where spiralling house values are becoming a concern.

More people think house prices are a “very serious issue” compared with those who are concerned about their home losing so much value that they are stuck in negative equity in Scotland, Wales, Yorkshire and the Humber, the North West, the West Midlands, the East Midlands, the South West, the South East and London.

The North East and Northern Ireland, where prices have only recently started to stabilise, were the only areas where the danger of tipping into negative equity is still seen as a more serious concern than rising values in the property market.

When asked about what housing issues they thought were very serious, across the UK, 39% of people highlighted house prices, 25% pinpointed negative equity and 33% selected housing availability.

More than half (52%) of those surveyed said that gazumping - which happens when someone thinks they have agreed a deal to buy a home before another buyer steps in and outbids them - is a problem.

The Homeowners Alliance report suggested that “the housing crisis is most acute in London”.

The English capital is the area where people are the most concerned in the UK both about house prices and housing availability, with 55% and 44% of Londoners voicing concerns over these issues respectively.

Northern Ireland is the area where people are most concerned about negative equity, with almost half (47%) of people there highlighting it as a very serious issue, according to the group’s 2014 Annual Homeowner Survey.

Many homeowners who bought their house around the pre-financial crisis peak of the market found that as the downturn took hold, the value of their property tumbled to such an extent that they were trapped with little equity in their home or that they had even ploughed more money into it than it was worth, pushing them into negative equity.

But the housing market has picked up significantly over the last year, amid growing consumer confidence in the wider economy and the widespread availability of cheap mortgage deals in the low interest rate environment.

Government support schemes such as Help to Buy have also made it easier for people with small deposits to move on or up the property ladder.

As housing market activity has lifted, fears have also been raised that the London market in particular, which also has strong interest from overseas investors, is edging towards a “bubble”.

There has been speculation that the Bank of England could step in to calm the situation.

Paula Higgins, chief executive of the HomeOwners Alliance, said: “Despite talk about the London bubble, worries about high house prices and the shortage of housing have become a national issue.

“Talk about the housing crisis has spread across the UK as homeowners everywhere have become worried that housing is becoming unaffordable and owning their own home is becoming an impossible dream for young people.”

Figures released by building society Nationwide last week showed that the price gap between homes in London and those in the rest of the UK is now at the widest levels on its records.

London house prices have leapt by 18.2% annually, which is the strongest rate of growth seen since 2003, to an average £362,699, according to Nationwide’s figures.

Across the UK, prices have lifted by 9.5% year-on-year, taking the typical value to £180,264, amid signs that the upturn in the market is gaining momentum across the country, Nationwide’s report for March said.

Ms Higgins continued: “The surge in house prices this past year is not welcome news in the capital and it is a growing worry in other parts of the country, particularly for those hoping to buy their first home.

“Rising prices in London and elsewhere are due to a lack of supply as competition is fierce among buyers chasing too few homes.”

Here are the percentages of people in each region who believe house prices are a very serious issue, followed by those who consider negative equity is a very serious issue and finally those who think housing availability is a very serious issue. The research was undertaken by YouGov:

:: London, 55, 24, 44

:: South East, 43, 21, 31

:: North East, 42, 44, 33

:: South West, 42, 17, 35

:: Yorkshire and the Humber, 39, 26, 36

:: North West, 36, 25, 31

:: East of England, 36, 26, 28

:: Wales, 36, 24, 28

:: West Midlands, 35, 24, 30

:: Scotland, 32, 24, 38

:: East Midlands, 30, 23, 23

:: Northern Ireland, 22, 47, 20