If you bought your house at the peak of the housing boom in the middle of 2007, you may be stuck in negative equity until 2014.  This is the opinion of the National Housing Federation which has recently published a report on the subject.  Figures show that 1.3m people bought a house when prices were at an all-time high.  Now their homes are worth less than they paid for them and this will remain the case for the next four years according to the Federation.

The report is highly pessimistic; in addition to saying that a significant minority of homeowners are in negative equity, it also states that Britain is in the midst of the worst housing crisis for generations.  Figures compiled for the federation by Oxford Economics show that the average house price has dropped from £216,800 to £210,500 since the height of the boom.  It also suggests that this figure will drop to £204,200 next year before prices start to rise again.  More positive news for homeowners comes in the prediction of the average value rising to £226,900 in 2014.

The National Housing Federation represents Englands housing associations and says that a whole generation are in danger of being locked out of the housing market as a result of high house prices.  The number of first time buyers dropped to 199,000 last year, which is a third of the 600,000 first-time buyers recorded a decade earlier, in 1999.

The report, titled "Home Truths", says that the problems facing those in negative equity are overshadowed by a much greater crisis in the housing market as a whole.  The Federations Chief Executive, David Orr, said: For those who bought at the peak of the housing boom, there is a strong possibility they will have to wait another four years before their home is worth what they paid for it.  For a significant minority in negative equity the consequences are devastating. They have a major problem if they need to sell.

Statistics show that house prices are 120% higher than a decade ago and whilst that will be cold comfort to those who bought at the peak of the market, this statistic is keeping a growing number of people off the property ladder.  Only the rich, well paid or those with generous parents seem to stand a chance of getting on it.The problem is exacerbated by the lack of new homes in the country; construction began on just 87,360 new homes in 2009/10 & a third of the number of new households that formed in that time.