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Number of households in negative equity falls

100,000 less borrowers in negative equity

October 31, 2012

The number of homeowners in negative equity has fallen over the last 18 months according to a new report released today by the Council of Mortgage Lenders. There are now 719,000 borrowers in negative equity compared to 827,000 in the first quarter of 2011, a 13% drop. Despite an uncertain housing market the amount of unmortgaged housing equity has remained roughly the same at about £800 billion.

There is even good news for the most maligned group of homeowners – first time buyer. The proportion of first time buyers in negative equity who took out a mortgage after 2005 has fallen significantly from 26% to 20%. 80% of all the homeowners who took out a loan after 2005 have an equity cushion of at least 10%.

However, it isn’t all good news. House price falls due to the crash in 2007 have not been fully recouped so the total housing equity has been reduced. Mortgage borrowers wealth has dropped from £2,100 billion to £1,850 billion.

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