Negative Equity Friday, 20th February 2009

With house prices continuing to fall by a further one per cent in January, many of the UK's mortgage holders are very concerned about negative equity. This is because a large proportion boughtthier home at the height of the property boom, which is why as prices fall they are becoming increasingly concerned over the value of their home.

In addition there are those with negative equity on an interest only mortgage and were hoping that their property would be worth more than they borrowed.

the other concerns relate to those who wanted to use their hame as a pension and those that wanted to use the equity in their home for retirement purposes.

House prices continue to fall, a large number of mortgage holders are becoming worried about their position.

Mortgage rates are slow to fall and repossessions are on the up. The Government has tried to relieve this added stress for homeowners, but it is clear that more needs to be done before house prices fall further and push more people to worry about negative equity.However, for those considering equity release to supplement their retirement, negative equity is unlikely to be a real issue in practical terms as most people considering this option are likely to be mortgage free.

But as long as they can pay the mortgage people may not concerned about negative equity, and homeowners are right to focus on paying the mortgage.

The prevailing economic conditions also mean that many people are getting next to nothing on their savings and investments and with potential job losses meaning that further debt, or at least the prospect of it, is looming in the background, negative equity is just one more issue for people to worry about.