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Negative equity conditions 'developing'

By Jonathan Dawes, Wed 23 Apr 2008 - Published in Mortgages

The conditions required for people to experience negative equity are present in some areas of the country, it has been claimed.

A housing market expert has argued that the current climate in the property sector could lead to negative equity developing within the coming years.

However, although the conditions with regards to negative equity are developing, falling house prices are putting those looking for mortgages for the first time in a stronger position, said Jonathan Upton, business development director at Mouseprice, a property market information provider.

"For people who aren't on the housing market yet, falling house prices put them in a stronger position in regards to negotiations," said Mr Upton, adding that there were ramifications whichever way that house prices moved.

Recent figures from the Land Registry show that house sales between September and December 2007 fell to 90,880 per month, down from 117,301 per month during the same period the previous year.