Rent Guarantee Insurance | @RightmoveAddict – Living with the Curse of Negative Equity, a Personal Story
Most of our landlords use our guaranteed rental income scheme. We have our own list of tenants waiting to move into properties. But just in case there is a void period, should happen, and for some reason your property should be without a tenant, we offer a rent guarantee scheme.
As we all know there are many stories a day about the property market – whether it’s that the market is on the up, or that mortgages are down – but for the thousands of people living with the curse of negative equity, each of these reports can feel like a sting:
What is negative equity?
According to Which?*: Rent Guarantee Insurance
‘Negative equity means that the amount outstanding on your mortgage is higher than the value of your property.’
17% of those home owners who have suffered a price fall since 2007 have been hit by the ‘negative equity curse’ 17% of those 2007-2012 buyers who believe their property has declined in value since purchase also state that they are currently in negative equity, believing their outstanding mortgage balance to be higher than the current value of their property. Click here to view the full Rightmove report.
The Council of Mortgage Lenders** report that in Wales 45,000 (14%) of houses-holds are in negative equity. This compares to 70,000 (5%) in the South East of England and an unbelievable 69,000 (35%) in Northern Ireland.
My story
In December 2008 we bought a new home. Having just moved to the South Wales region, we were enticed by the offers available. We bought a lovely 3 bed semi, it seemed perfect for our budget and we thought we had a great deal. We chose our plot carefully ensuring that we had uninterrupted views of beautiful Welsh mountains.
As some of you may know, I tend to move a lot. I can’t explain it but after about 18 months in a home I get itchy feet. So yes, in true form after 18 months we put the house on the market. Where were we moving, who knows, but I just knew I was ready for a change. We had bought the house for £135,950, we couldn’t afford to take a loss so thought we would put on the market for £139.950. We were not the only ones – there were a couple of others on our development for sale at that time, same size, same prices.Rent Guarantee Insurance
It doesn’t take a genius to know that we didn’t sell quickly, and after about 6 months of living in limbo we decided to take it off the market. Since having our son, hubby has needed an office and after setting up new business and being co-owner of A Passion for Homes, I needed space to work and call my own too. Our 3 bed semi is now too small for our requirements. Another complication was location. We spend the majority of our time in the Cardiff area, and our home is about 40 minutes away. The time spent driving was a slight problem but the increasing cost of petrol has certainly been a financial strain.
Emotionally, being in this situation is draining. The recession has been hard on many and for some it has been devastating, loosing their homes and completely tearing their hearts and lives apart. Yes, those of us living in negative equity are lucky in some ways but in other ways we are living our own heart-ache.
Everyone has a reason they want to move, whether want, need, starting over, upsizing, or downsizing, but knowing that your mortgage is more than the current value of the home makes you feel trapped. This is how we feel.
We have suddenly been given a lifeline, a little bit of magic that maybe able to dispel the curse we are under. So again we are going to trying to sell our property, as we have found our new home. Our new home needs complete renovation, and that is so exciting I have already been looking at swatches!
Deciding to sell our home again we were grateful to Simon Bradbury @ThomasMorrisEA for his advice. We have now put our home on the market with Gavin from Bidmead Cook who is up for the challenge.
Getting our house ready for sale has been a battle of wills as those of you with children will know. You can paint your walls, de personalize, de-clutter, and clean. You then hide all the toys for viewings, as quickly as you are doing it the little cheeky monsters are dragging them all back out. Joking aside I understand the importance of presenting your house and hopefully we have done a good enough job.
We have loved living in this property. One of the fantastic and unique things is the panoramic view of a beautiful and wooded sweeping valley. Sat on our sofa you can see the seasons change in wonderful Technicolour. As mist comes in across the mountains it becomes haunting and mystical, in the summer you see all the shades of green glistening in the sunlight. Last summer we worked hard on the garden creating decked areas, which are fantastic. During the rare nice weather we sit out on our swing, our BBQ sizzling in the summer breeze whilst we warm ourselves with the heat from our fire pit. The area is quiet, and the neighbours friendly. The children trick and treat together, everyone decorates for all occasions especially Christmas when driving up the hill to the development the white and blue lights glisten in the crisp winter air. These are all things I will miss but it’s time for a new chapter.
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