Is The Heath a £167million Mortgage ticking Time-bomb?

I was having an interesting chat with some homeowners who live in one of those lovely bay fronted semis in The Saint’s area of Heath, between Rhydhelig Avenue and Heathwood Road. They wanted to know my thoughts on the current state of the Heath property market.

With the Conservatives winning the General Election in May, this did release some pent up demand as people were holding back due to the political uncertainty of a potential hung parliament. However, with the result that ensued, confidence has returned and the signs are good in the City as a whole, as the underlying picture is likely to be one of decent yet modest recovery. This will be supported by favourable conditions in the South Wales economy, though it will be limited by a reduction in the number of properties coming up for sale, the new mortgage lending rules introduced just over a year ago and affordability pressures.

... and it was the mortgage lending that particularly interested them as he worked in finance. They had read a report in the newspapers that according to the Council of Mortgage Lenders, the level of mortgage lending had soared to a seven year high in the UK and they were worried that people were mortgaging themselves to levels that they wouldn’t be able sustain when interest rates rose. I was able to tell them that if you added up everyone’s mortgage in Heath, it would total £167.4m (£167,461,000 to be exact). That is a huge amount of mortgage debt until you realise it is a drop in the ocean when compared to the total value of all the properties in Heath.

The total combined value of all the

Properties in Heath is £1,272,709,368  (ie £1.27billion)

Therefore, in Heath, the level of mortgages as a whole is not an issue, as the level of mortgages only represents 13.1% of the total value.

Looking at the current situation regarding the saleability of Heath properties, 127 of the 230 properties for sale have a buyer and are sold subject to contract. However, delve deeper and of the 51 properties that have come on the market in the last 28 days (at the time of writing), only 8 have sold. The mix of properties sold were three semis ranging in price between £270k and £365k, four terraced houses ranging in price between £180k and £235k and a retirement apartment on the edge of Heath for £50k. It just shows you have to be realistic when it comes to pricing, especially if you want a reasonably quick sale.