Thousands in negative equity danger says National Homebuyers

Tens of thousands of homeowners are at risk of falling into negative equity, according to new research.

[UKPRwire, Fri Nov 02 2007] Mform claims that as many as 33,000 people could be facing the prospect if house prices fall significantly.

The firm claims that a growing trend of people taking out 100 per cent mortgages means that many are in real danger of owing more on their mortgage than their property is worth.

"In April this year, our research showed that there were 92 different 100 per cent mortgages to choose from, but by October 1st this had increased to 160," said Francis Ghiloni, mform.co.uk marketing and business development director.

"However, if house prices fall, as some commentators predict, those homeowners with these mortgages are likely to encounter negative equity," he added.

Recent figures from Hometrack revealed that property prices did fall between September and October by 0.1 per cent.

This, and other indices which have been showing a steady decline in house price growth, may force many people to think about making a quick property sale.

David Harber, Operations Manager of National Homebuyers says the risk of repossessions is ever greater and many more homeowners are looking for a quick sale.

Speaking on BBC Radio Five Live's 'Wake Up To Money' programme, Mr Harber says "The number of repossessions will increase and homeowners are already seeking to sell property quickly.

"Sell and Rent Back is a way in which homeowners can sell their home but remain as a tenant. These tenancy contracts permit the customer to continually renew their agreement.

There are smaller, less scrupulous businesses offering a similar product, but Mr Harber says National Homebuyers are calling for regulation of this industry.

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