16
May
First-time buyers 'should not be afraid of negative equity'?
Property owners who find their homes are now worth less that their
mortgages should not panic, an expert has advised.
Research by Morgan Stanley and reported in the Times predicts one
in ten homeowners will be pushed into negative equity over the next
two years as house prices continue to drop.
First-time buyers will be the most affected by the problem but have
been advised to stay calm and hold on to their properties.
Paul Holmes, operations director for property ladder advisers
Firstrung, says it's a matter of "weathering the storm" until the
market recovers.
He explains: "There is no alternative because in this market place
you couldn?t sell to recover your losses anyway."
If house prices fall by 25 per cent over the next two years, Morgan
Stanley predicts more than a quarter of all borrowers will be in
negative equity.
