Others pointed out that it is those who bought new build properties that are most at risk of falling into negative equity.
R3 Mortgages director, Riz Malik said: “New builds usually carry a premium against similar properties available in the secondary market. Therefore, if the whole market falls in price and your property already had a premium you could be hit the hardest.”
“In these cases, refinancing options may be limited when their deal expires forcing people to remain with their current lender,” Malik explained.
Others in the industry noted that speaking to the current lender should be an individual's first port of call if they are concerned about negative equity.
EHF Mortgages founder, Justin Moy said: “Many lenders still hold products for negative equity clients, such as Barclays, so that will just continue.”
“When we are looking at the need to remortgage or find a new product, and the value is below the mortgage balance, then for the majority of mortgage holders, their lender, via their broker, will be able to help with a product transfer onto a new deal or stay on the standard variable rate if that is cheaper in the short term,” Moy added.
jane.matthews@ft.com
