Most homeowners 'do not need to worry about negative equity'

Fri 4 Jul 2008 - Published in Mortgages

Most homeowners who bought property over the past 13 years should not be affected by negative equity, according to analysis from GE Money Home Lending.

Results from the research show that a homeowner who bought their house with an average deposit on an interest only deal last year can expect to have an equity cushion which means house prices would need to fall by 19 per cent before they experienced negative equity.

Those who purchased a house in 2004 with the average deposit of Ł50,000 should have an equity buffer of 48 per cent.

Meanwhile a householder purchasing a property in 1995 would need prices to depreciate by 72 per cent to find themselves in negative equity.

Gerry Bell from GE Money Home Lending said: "Over the past decade homeownership has delivered fantastic returns for many borrowers and we would need to see unprecedented falls in property prices for the average home owner to be severely impacted."

In related news Firstrung has said the main beneficiaries from the predicted fall in house prices will be first-time buyers.

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