|
Negative equity threat facing some homeowners
24 April 2008 10:30
Some homeowners are at risk of ending up with negative equity, a property market information website has warned, although conditions may help first-time buyers (FTBs).
Research by Experian has found that 78,394 households have less than 20 per cent equity in them and could struggle if house prices dip substantially, with potential negative equity hotspots identified within south-east London, Birmingham, Manchester and Glasgow.
Mouseprice's Jonathan Upton concurred that conditions for negative equity do exist in some parts of the UK, but noted that the possibility of this occurring varied according to the size of people's deposits, when they bought their home and their location.
He added that whether it is wise to cancel plans to move at present depends on the homeowner, arguing that those who would be taking on far more debt are right to be cautious, but urged people to buy based on their lifestyle needs rather than as an investment.
Mr Upton also recognised that while house prices falls have both positive and negative ramifications, people yet to get onto the property ladder will now be in a stronger negotiating position because of recent price movements.
|
