Buyers who took out 100% mortgages before last year 'safe'

People who took out 100 per cent mortgages before last year should be "fairly safe" from negative equity issues, according to an expert.

Andy Pratt, a spokesperson for advice firm Alexander Hall, made the comment after a report by Morgan Stanley predicted that house prices may fall in the next two years and leave one in ten homeowners in negative equity.

The expert stated that the only people who may have difficulties with negative equity are first-time buyers who took out a 95 per cent loan-to-value mortgage in 2007.

However, he said that this only accounted for ten per cent of the borrowers last year.

"Anyone who''s taken out a mortgage before that time – even up to a hundred per cent – will actually be fairly safe because of the increase in house prices," he added.

The Council of Mortgage Lenders recently claimed that many first-time buyers looking for a property this year are turning to their family for help.

Spokesperson Bernard Clarke said that many parents have experience equity growth on their homes, meaning they can use it to help their children raise a deposit.

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