Negative equity 'less concentrated' in first-time buyers

17-Apr-2009

First-time buyers have less negative equity than other homeowners, according to a new report.

According to research by James Tatch, senior statistician at the Council of Mortgage Lenders (CML), 900,000 homeowners have negative equity.

First-time buyers faced with negative equity have around £6,000 in shortfalls and other homeowners are faced with £8,000.

But Bob Pannell, head of research at CML, said unlike the economic downturn in the 1990s, the negative equity is "less concentrated among young, first-time buyers".

He added that it was more spread out among people on all points of the property ladder.

Mr Pannell continued that although negative equity would affect the turnover of homes on the property market, buyers would still be able to get loans from banks if they had a good track record.

This news comes after a report from the Royal Institution of Chartered Surveyors in March showed a monthly increase in new buyer inquiries for the fifth consecutive time.

The report suggested that the housing market was improving.

Nationwide's latest house price index showed that house prices in March rose by 0.9 per cent. This is the first monthly increase since October 2007.

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