What is negative equity?

“I’m in Negative Equity,” is something that many of us are hearing and talking about these days.

This is because more and more people have been caught in the ‘negative equity trap’ since house prices feel so rapidly since the highs of 2006/2007.

And it seems many of us are still struggling to cope with the stresses and strains that negative equity brings.

According to a report on www.belastlive.co.uk in May – two thirds of those surveyed in Northern Ireland (69%) say they are really worried about negative equity.

The YouGov survey conducted on behalf of Home Owners Alliance, BLP Insurance and Resi.co.uk discovered that almost seven in ten people in NI are worried about negative equity, compared to half the population across the rest of the UK.

Homeowners Alliance Chief Executive Paula Higgins said of the survey results: “It’s understandable why those living in Northern Ireland are the most concerned about negative equity.

“The market hasn’t yet recovered from the financial crisis of 2008, when millions around the country suffered negative equity. 

“At the time the average house price plunged by 15 per cent – and average asking prices in Northern Ireland are still 30 per cent lower than they were 11 years ago.”

But what is negative equity and how large is the problem?

A property is in negative equity if it’s worth less than the mortgage secured on it.

An example of this if you had bought a property for £180,000, with a mortgage for £165,000 and the property is now worth £100,000, you would be in negative equity by £65,000.

It’s estimated that there are around half a million properties in negative equity across the UK, although some areas are affected far more than others.

In Northern Ireland up to two out of every five properties bought after 2005 are in negative equity.

Worrying times but as a company we have a proven track record in helping Homeowners and Landlords move on from negative equity; our average negative equity write-off is 77% for our clients in 2018 ( where they have sold their property ).

And since 2013 our success rate is 96.6%.

And we also have received a 4.8 rating out of five from independent review site www.reviews.co.uk.

We are currently the only specialist negative equity and property debt company operating in the UK that offers the full range of services that clients need.

When it comes to finding the best solutions to property debt issues, nobody goes further or has more experience than our Negative Equity UK team. We’ve built our team and our business around you, our customers.

As the recognised industry experts in providing innovative property debt solutions, we are authorised and regulated by the Financial Conduct Authority (FCA number 688199). Our expert team consists of banking professionals, Insolvency practitioners, mortgage and finance specialists and chartered accountants

Our staff are trained to be non-judgemental and to act in a manner that is both compassionate and respectful. 

We go the extra mile because we want to make a difference. We want to help you move forward in a positive manner.

We are the recognised industry experts in providing innovative negative equity solutions. Our average property debt write-off in 2017 exceeded £75,000 per customer

And Tom Cardwell (Director at CD Fairfield) believes people should stop blaming themselves for being caught-up in negative equity.

“If it is an issue, you have to deal with it sooner rather than later. Hopefully, the stigma attached to the issue has reduced over time. 

“We are very active in putting out good content in terms of what is happening in the industry and where the mortgage market is at.

“What I really mean by that is would have been very difficult to purchase a property 10 or 12 years ago and not be in negative equity today.

“So it wasn’t that people in negative equity have made some horrendous financial choice, or some reckless financial decision.

“They simply bought a property at the wrong time. It was just a matter of timing. First-time buyers in the last six or seven years don’t have this problem. They don’t have to worry about it.

“It is those who have re-mortgaged or purchased a buy to let property. Or purchased their first home during those boom years. 

“It was all-encompassing. And it certainly is not something that was restricted to those with low incomes. We have clients where the household income was well in excess of one hundred thousand pounds.

“But they still have a debt issue and it is something that they will have to address. The first thing to do is recognise there is a problem. 

“The second thing to do is seek some assistance and the third thing you have to remember is that the client was a victim of an economic crash and it is not something they have done.

“If someone is worried about negative equity? No matter what the level of their negative equity they should get in touch with us. 

“We can put their mind at ease. We can explain to them exactly what their position is and we don’t engage in flannel or false hopes. In an empathetic fashion, we tell people where they stand.”

And Cardwell added: “Negative Equity is only a problem if you have to deal with it or do something about it.

“If you are in a position where you can repay 100% of your mortgage in the remaining term and you have no desire to move, then you don’t have to redress your negative equity problem in the short term.

“They might want to re-negotiate the terms of their mortgage and that is something we can do and help clients with. 

“But predominantly the clients that are approaching us are ones that can afford to service the mortgage debt – normally an interest-free mortgage – on a month to month basis.

“But the level of negative equity in terms of repaying 100% of that debt is insurmountable in the remaining term of their mortgage  

“Also there could be other factors that would be part of the equation. Usually, clients would come to us and they are first time buyers in the boom years between 2004 and 2008.

“They purchased a one or two bedroom house, or maybe even a smaller three bedroom property and they had no children at the time. The house suited them and was perfectly affordable. 

“Now they have had a few children and now the house is impracticable for them to stay in that property. 

“It is just not big enough and an example I use is that if the Housing Executive had been housing them – they would have been rehoused.

“But because it is their own property they are supposed to grin and bear it. But I don’t think that is reasonable?

“The good thing in our terms of our relationship with lenders and they will recognise that, even though a lenders first position is not to help a client in that position.

“But that is not their final decision and there is a responsibility from lenders to treat customers fairly. And putting that across in a compelling way can bring lenders to the table,” he added.

Speak to Bob today on 0161 660 4403 to see how we can help you.

If your house is in negative equity we at Negative Equity UK can help you get the result you are looking for

In the UK in May house prices fell 0.2% from April according to the Nationwide building society, while in Northern Ireland 69% say they are worried about your negative equity house.

These suggest that many homeowners are still stuck in the negative equity trap.

The YouGov survey conducted on behalf on HomeOwners Allicane, BLP Insurance and Resi.co.uk discovered that almost seven in ten people in NI are worried about negative equity, compared to almost half the population across the rest of the UK.

But what is negative equity?

A property is in negative equity if it’s worth less than the mortgage secured on it.

An example of this if you had bought a property for £150,000, with a mortgage for £120,000 and the property is now worth £100,000, you would be in negative equity.

It’s estimated that there are around half a million properties in negative equity in the UK, although some areas are affected far more than others.

In Northern Ireland up to two out of every five properties bought after 2005 are in negative equity.

As a company we have a proven track record having achieved an average write-off of 77% for our clients in 2018.

And since 2013 we have achieved a write-off rate of 96.6% for our clients.

Our service is also 100% confidential and regulated and authorised by the Financial Conduct Authority and we can help.

Many people have questions about how striking a deal about your Negative Equity impacts you and here Tom Cardwell (Director) gives his thoughts on frequently asked questions.

What is the likely effect on your credit rating by a negative equity settlement?

“It is a prime concern for customers who come to us. Most of our clients have more than one property. They have their own home that is in positive equity and they might have a buy to let property between 2004 and 2008 that is in significant negative equity.

“They are concerned about dealing with their negative equity in case it affects their home.

“That is why we employ a detailed case review service to look into the clients circumstances and then look at the options they have. In a vast number of the cases we are able to deal with the negative equity problem without any impact to any other assets the client owns.”

Can I sell a negative equity property and negotiate an agreement if I have other properties?

“This is another common problem that people come to us with as they have one or more properties in negative equity. They might also have no debt on a property and maybe one that is in significant positive equity.

“Once we have completed our review process we will have a good idea what kind of settlement and deal that can be done with those properties and their negative equity.

“In the majority of circumstances there is no detriment to the equity in other assets,” added Cardwell.

How do you know how much my settlement is going to cost?

“Having completed hundreds of negative equity samples over the last few years we have a good understanding of what is needed although these differ with each case.

“At any one time we could be dealing with over 700 live cases with a variety of lenders. At the very start of the process we complete a case review for you.

“And in that process we access your current and future affordability and look at the level of your negative equity. Look at who your lender is and look at your documentation.

“We pull all that information together and that will give us a good indication of what it will cost you to end your negative equity debt and you will be free of it.”

How much does a negative equity settlement cost?

“The cost of settling negative equity differs depending on your affordability, your age, your health, which lender we are dealing with.

“And it also depends on the terms around the settlement itself. In the vast majority of cases we negotiate a debt reduction of 75% or more of the negative equity sum.”

Is selling a negative equity property the only option?

“Sometimes selling a negative equity property is not always the best option. When we complete a case review we look at all the available options for the client.

“And what makes us unique in that field is that we have a FCA license as well as having permission to negotiate financial settlements for clients, we also have a credit broker license so we can propose a new way forward to the deal is that is appropriate,” added Cardwell.

And the proof that we deliver on what we say can be seen at www.reviews.co.uk

Here are a few examples of people we helped out of their negative equity problems.

Stewart – “I highly recommend this company. We were told exactly what would happen and there was guidance every step. Once the initial paperwork was completed we didn’t need to do anything.”

Denver – “I found they gave a helpful service. They helped keep stress levels down and understanding of our situation. Would recommend them for people in hard financial situation with their homes.”

D&E “Got us a fantastic outcome. Over £100,000 of negativity equity and unsecured debt settled for £27,000. Onwards & upwards.

As the leading negative equity company speak to Bob or Neil today on 0161 660 4403 and see how we can help you.

A Guide To Your Credit Rating

Your credit rating, which can also be referred to as your credit score, is something which is often talked about or used in adverts and credit applications – but what exactly does it mean, how are they calculated and why are they important? Hopefully by the time you have finished reading this you should understand more about them and how to improve or maintain your own rating.

What is a credit rating?
A credit rating is a 3 digit number which shows how you have handled credit in the past and is therefore a good indicator of how you will handle credit in the future. Lenders use your credit rating to help them come to a decision when you make an application for a credit facility, such as a loan, credit card, mortgage or an overdraft. The higher your credit rating, the better you have handled credit in the past and therefore the more likely you will be accepted for credit.

Why is a good credit rating important?
A good credit rating is a big indicator on how successful you will be with a credit application, however it is not only the success of credit applications that can be affected by it. If you work in financial services for example, prospective employers may ask to check your credit rating before offering you a job, insurance companies can check your credit rating when you apply for insurance and this can affect your offered rate and your mobile phone or internet provider will also check your credit rating before agreeing to offer you their services.

What improves your credit rating
There are a few easy ways to improve your credit score, which starts with ensuring you are on the electoral roll at your current address. This ensures accuracy for a creditor when confirming your identity and your current address, which reduces their risk when you make a credit application. The less risk involved to a lender when you make a credit application, the more comfortable they will be at lending you the credit.

If you have existing credit facilities, like a loan or credit card, ensuring you pay your repayments in time each month helps show you are a responsible borrower and improves your credit rating.

Paying your household bills on time can also improve your credit rating, as many utility providers now report to the credit rating agencies, so this will show that you are responsible at repaying bills.

What reduces your credit rating
There are also ways your credit score can be reduced that you can actively try to work towards minimising, so they do not apply to you. The first you should try to achieve is to keep your credit card balances as low to a % of the total limit as you can, and ideally no more than 25-30%. So, if you had a credit card with a limit of £3,000, you should attempt to ensure your balance is no higher than between £750-£900 every month. If your credit card balance % reach the levels of 80-90% or greater of their total balances, then this will have a particularly detrimental effect on your credit rating, as it shows that you are currently struggling to reduce your credit balances and therefore is a sign that you could be in financial difficulty.

Your overall level of unsecured debt can also reduce your credit score, with some credit reference agencies indicating that total unsecured debt of £20,000 or higher can make a small impact on your credit rating regardless of your repayment history as you may be a higher risk for further lending.

Making multiple credit applications in a short period of time is another trigger that can reduce your credit rating, as it can indicate you are desperate for credit and therefore currently higher risk.

You should also regularly check your credit report to check for mistakes, as lenders can occasionally get things wrong. If this happens, by engaging with the credit rating agency and the lender these mistakes can be addressed which will correct your credit rating once again.

However, the major impactors on your credit rating however are missing repayments on a loan or credit card, with multiple offences in succession of each other particularly adverse to your rating. A CCJ or defaulting on an account is also particularly detrimental to your credit rating, along with an insolvency procedure such as bankruptcy.

I have been turned down for credit because of my credit rating, what can I do?
If you have been turned down for credit, then it’s unlikely that an application with another lender will be successful. Your credit rating will have been impacted by the search and refusal from the first debt credit application, and lenders generally have similar criteria for credit ratings when accepting applications.

If you have been seeking further credit, this may be as you are struggling to maintain the repayments on your existing debts or are unable to manage your outgoings without taking further debt. This is a sign that you should seek advice on what options are available to help you with your current debts before your situation deteriorates further.

Seek professional advice – Contact us now
Our dedicated team of debt advisers are ready to help you deal with your debts and can talk you through all your options for free. They will provide clear advice on how you can move forward with your debt and get debt written off.

Our advisers are non-judgemental, and everything discussed is confidential so you can talk to us if you have a personal, health or other issue that has made it harder for you to manage your finances.

If you are based in Northern Ireland, if you prefer you can also come visit our offices in Belfast for a face-to-face meeting.

To arrange a call back with a debt adviser just click here.

Landlord Selling Up

Tenants in the private rented sector could find it much harder to rent a property, according to new research by the Residential Landlords Association.

A survey of more than 3,000 landlords conducted by the RLA has found that 22% are planning to sell at least one of their properties over the next 12 months, while at the same time 33% report growing demand for rental accommodation over the last three years.

According to the RLA, who used figures from HMRC, if these landlords reduce their portfolio by only one property each, that would amount to a total loss of 76,000 properties available to rent over the next 12 years.

More than a third of the landlords surveyed, 35%, said that recent tax changes including Section 24 phasing out mortgage interest tax relief and the hike in Stamp Duty, along with other reforms to the private rented sector, including the cap on tenants’ deposits and the ban on letting agents’ fees, were forcing them to withdraw from the sector or increase rents.

The RLA Chairman, Alan Ward, said:  “As demand continues to increase for homes to rent, punitive tax changes are discouraging investment by the majority of good landlords who want to provide accommodation.

“Whilst efforts by the Government to support institutional investment in the sector are welcome, this will remain a drop in the ocean.

“To meet demand, we need pro-growth taxation that actively supports and encourages the majority of landlords who are individuals providing good housing, to invest in the new homes to rent we so desperately need.”

The new research from the RLA comes as UK Finance also published research showing that buy to let investors were pulling out of the capital and investing elsewhere, with Manchester a preferred destination.

Together the figures from the RLA and UK Finance suggest that the impact of a shortage of rental properties caused by landlords selling existing stock could be felt more acutely in certain parts of the country, with the capital worst affected.

If you’re a landlord selling up a property as a result of Section 24 and the increase in Stamp Duty, or you have a property in negative equity, contact Landlord Debt Advisory on 0161 222 4311, or go online to landlorddebtadvisory.com

Have You A Negative Equity Mortgage?

If you purchased your house around 2006 – 2008 and find yourself in Negative Equity but according to an article on Net House Prices even people who took their mortgage out in 2014 would find themselves in negative equity if there was a 10% drop in house prices. With the increased uncertainty around Brexit the continuation of the current drop in values it is a real possibility.

Negative Equity UK which is part of the CD Fairfield Capital Group are the leading experts when it comes to negative equity.  If you find yourself in this situation do not worry as we have helped hundreds of families all over the UK achieve a mortgage write off in order to allow them to negotiate a new mortgage or move to a new home.

We can carry out a bespoke case review that takes into consideration each client’s individual circumstances and provide our clients with a range of options on how they can solve their negative equity problem.  We are proud of our net promoter score of 90% and the independent rating of 4.88/5 from our clients, this results in us being the highest independently rated debt management company in the UK.

With a dedicated and experienced team of financial advisers and insolvency practitioners in-house we are also the only negative equity company in the UK to be approved and regulated by the FCA on all the options available to help you with your negative equity problem.

Negative Equity UK was started by Phil Davison & Tom Cardwell who have over 20 years of combined experience between them in the property and financial sectors.  With our average mortgage write down of over £75,000 and a success rate of 96.6% we are sure that we will find the right solution to allow you to move on.  So if you are looking for a negative equity mortgage solution get in touch today on 0161 660 4403 to see how we can help you achieve a mortgage write down.

What Is Negative Equity

What is Negative Equity?

Negative equity happens when something is worth less than the finance (mortgage or loan) taken out to purchase it originally.  It is a common problem after the housing market crashed in 2008 but as the housing market has never recovered to the 2008 levels hundreds of thousands of people still find themselves still in negative equity.

What Does Negative Equity Mean?

While your home is in negative equity you will find it difficult to borrow money against the property and will also struggle to sell the property in order to move to a new or bigger home.  At Negative Equity UK with over 20 years of experience in the property and financial  sectors they have helped over 750 clients achieve a mortgage write down through negotiating with your mortgage provider.  Their average write off is over £75,000.

How to Get Out of Negative Equity?

Negative Equity UK (part of the CD Fairfield Capital Group) are one of the highest rated debt management companies with a 90% NPS score and 4.88/5 stars on the independent reviews.co.uk website.  As one of the only property debt companies in the UK which are authorised and regulated by the FCA to offer the full range of options available to get you out of your negative equity situation.

How can I refinance my home with negative equity?

There are options available to you if you are looking to refinance your home even if it is in negative equity.  Speak to us today on 0161 660 4403 to see how we can help you.  We can even look into whether you were mis sold your mortgage.

How To Get Out of Negative Equity Home?

If you are in a negative equity situation and looking to find out your options have a no obligation and confidential chat today on 0161 660 4403. You can also read some of the case studies and amounts of debt write off’s we have achieved for a selection of our customers.