Homeowners have been waiting for news that the housing market is going to be gaining strength and giving them back the opportunity to build equity in their properties.  A large number of homeowners have been fighting off or falling deep into negative equity. Negative equity occurs when the property mortgage debt becomes larger than the value of the property. If house prices increase then homeowners will once again see the equity in their property begin to grow.

House prices are expected to benefit from the new Help to Buy scheme because it will help bring first time buyers back to the housing market. The scheme will help buyers get into new properties with a 5% deposit and the government offering an interest free loan for the remaining deposit up to 15% of a newly constructed property’s purchase price. The ceiling limit for the scheme is £600,000.

Expectations in the housing market for the near future were offered by Rightmove director, Miles Shipside, “In today’s turbulent world where economic crises seem more likely to re-appear than disappear, any market upturn will take longer to build home-mover confidence to the point that it starts to feed through to actual transactions. Even those who truly believe that the market has turned a corner may be unable to do anything about it due to lenders’ cautious risk profiling, a significant factor limiting the speed and strength of the recovery. However, with new sellers asking more than ever before as we enter the traditionally busy spring market and an expectation among home-movers of price stability or growth, there is now a bedrock upon which confidence and momentum appear to be building.”

The opportunity to build equity will allow homeowners to consider better interest rate remortgages in the future. Current remortgage offers are at historically low levels and those that can remortgage should consider the opportunities available while lenders are competitive for attention from homeowners.