Region a negative equity hotspot, says report

One in ten people in the North West is now trapped in negative equity, compared with just one in 75 in the South, according to a new report.

Ratings agency Standard & Poor’s argues that there is a growing North-South divide in the housing market, in terms of both property values and the ability to gain mortgages. House prices across the north of England remain almost 20 per cent lower than at the peak of the housing boom, while prices in the South have increased by around 10% this year.

The report also argues that there is a greater threat of repossession in the region as public sector job cuts beging to take hold.

“There is already a North-South divide in unemployment, house prices, and consequently mortgage credit risk,” the report states. “Given the North’s public-sector jobs bias, looming cuts in government spending could widen the gap, in terms of mortgage arrears and borrowers’ equity positions.”