UK Money News
3rd July 2008
Negative equity threat has been 'overstated'
The threat of negative equity is minimal for homeowners who bought their property as recently as four years ago, it has been claimed.
According to the calculations of GE Money Home Lending, people who bought their home four years ago have an equity cushion of almost 50 per cent before they fall into negative equity.
This applies also to those buyers who bought without a deposit, the lender said.
Furthermore, homeowners who bought 12 years ago are so secure that house prices would have to fall by 72 per cent.
Gerry Bell, head of mortgage marketing for GE Money 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."
News of Mr Bell's comments comes as data compiled by Nationwide found that house prices fell by 0.9 per cent in June to bring the value of the average property in UK to £172,415.
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