'Real threat' of negative equity

Certain areas of the UK face the prospect of negative equity, a leading industry website has asserted.

Jonathan Upton, business development director at Mouseprice.com, affirmed that the conditions are right for people who purchase property in certain areas to experience dramatic house price falls.

That would leave new owner-occupiers paying off a mortgage that exceeds the value of their home, prompting many analysts to warn that now is a perilous time to get on the housing ladder.

"The conditions that are required for negative equity are present in some areas," Mr Upton bluntly asserted.

He continued: "The situation with first-time buyers is difficult to call because it depends on the level of deposit that people took out and it depends when they bought it. It also depends on the area that they live in and the profile of the housing market that they're living in."

Recent research by Fool.co.uk found that almost a quarter of people in the 24 to 34-year-old age group are concerned about negative equity.

News posted on 23rd April, 2008