11
Jun
Negative equity worries "wide of the mark"
Fears of a widespread negative equity problem in the UK are
unlikely to be realised, Your Mortgage has said.
The magazine noted that the value of a property and the amount of
equity owned by the borrower are only important if the owner is
selling their home or remortgaging.
In addition, house prices trends vary considerably across the
country. Although prices are falling generally in Britain, that may
not be the case in everyone's street or area.
The National Association of Estate Agents emphasised this point
yesterday, suggesting that in order to get a clear idea of the
state of the housing market, people should look at the regional
picture.
Pauline McCallion, editor of Your Mortgage, commented: "If a
borrower wishes to sell or remortgage, having a 100 per cent or 100
per cent-plus mortgage at the moment does not necessarily mean they
will be in negative equity."
"If they took it out two or three years ago, such borrowers could
have repaid enough to bring their loan-to-value down to 95 per cent
or less," she added.
