Welcome to Community Housing and Development Corp.
This month, the Financial Services Authority estimated that if property prices fall by 30% this year, from their peak in 2007 - which is pretty likely seeing as we've already seen a fall of 20% since then - then over two million residential mortgage holders and 500,000 buy-to-let borrowers will be in negative equity by December.
This means all these people would owe more to their mortgage lender than their home would be worth -- and if they were to sell up, they would face a shortfall in order to repay their debt.
The fact is, this is not just a prediction. Many people are already in negative equity and, with prices expected to fall further, you could be next.
Who is at risk?
Those most at risk are borrowers who bought at the peak of the market, for example the end of 2007.
It's likely that your property's value has decreased since purchase. But your chance of falling into negative equity depends hugely on the deposit you put down when you took out your mortgage - and how much your debt you have managed to pay off since then.
If you put down a 50% deposit, for example, then prices would have to fall 50% before you would be in danger of negative equity. But if you borrowed 80% of the property's value or more, you could already owe more than your property is currently worth. This is especially true if you took out an interest-only mortgage, and therefore have not been gradually chipping away at your debt every month.
The other group of people at risk of negative equity are those who bought their home years ago, and may have seen their property rise in value since they initially purchased it, but who remortgaged to withdraw equity in their home.
Community Housing and Development Corp. is here to help you and, if possible, find a solution to your predicament. Please complete the short form to the right, and we will try to find you a viable solution.
Community Housing and Development Corp. is a non profit organization and never charges for its help or assistance .
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