Repossessed homes sell for less than half of their value
Repossessed homes in Northern Ireland have been selling for around 42% of their ‘true’ market value, according to a mortgage administration company.
HML’s research said foreclosed homes in the province, which are usually sold at auction, were fetching the lowest percentage of market value of any region in the UK between 2008 and 2013.
Scotland and the north of England were next worst affected by low values for repossessions – yet prices were at around 63% of value, much higher than in Northern Ireland.
However, the province has faced the steepest fall in prices since the boom of 2007, with prices down around 50%. In addition, HML has estimated that around 41% of Northern Ireland home loans are in negative equity.
Greater London was least affected, with repossessed homes fetching just under 80% of market value. HML said repossessed homes “typically” sell for between 60 and 70% of true market value.
Damian Riley, director of business intelligence at HML, said many people who had their homes repossessed did not realise that they would still owe money to their lender if the house sold for less than what they still owed.
Figures from HML showed that nearly 200,000 UK mortgage holders still owed money, with an average shortfall of £43,000.
Nicola McCrudden, policy manager at Northern Ireland charity Housing Rights Service, said it was not surprised by HML’s report.