UK homeowners have learned negative equity lesson

By Natasha Adamson

New figures from the Bank of England suggest that property owners in Northern Ireland and the rest of the UK have learned an important lesson when it comes to withdrawing equity from their homes.

The latest figures show that there was a negative amount of equity withdrawn from property in the third quarter of the year, not to be confused with negative equity, the problem which has made homeowners so cautious. Home owners in Northern Ireland and the rest of the UK are preferring to increase their equity share in their property, with a £10.4billion equity injection being paid into UK homes between July and September even though house prices have increased in many regions.

During the Northern Ireland property boom many homeowners 'took advantage' of the increased value of their property to withdraw more money from their lender, and for a few years it was the 'piggy bank' that kept on giving as prices increased steadily. However, when the property market crashed, most people saw most or all of those gains disappear, but of course the mortgage remained. Thousands of people found themselves in negative equity - owing more to the bank than their property was worth, and as a result could not sell their property or even switch their mortgage product.

The new figures from the Bank of England show that despite property price increases, homeowners are not being so quick to cash in on any uplift in equity, and are continuing on the path of mortgage repayment that they began during the recession.

If you are buying, selling, or remortgaging a property in Northern Ireland and require a conveyancing solicitor to handle the legal process for you, contact Wilson Nesbitt in Belfast by calling 0800 840 9290.

Or to read more information about property conveyancing in Northern Ireland click here.