Homeowners seeking a remortgage may be surprised to find how the decline in house prices has impacted their built up equity. According to some estimates it is only going to get worse. This is yet another reason that homeowners are seeking a remortgage now before their equity declines further.

Some economists estimate that there could be yet another drop in prices over the next two years by 20 per cent. This is due to the rising unemployment, rising inflation, tax increases, and public spending cuts. Fewer people have been able to enter the housing market and the lack of first time buyers has hit the market hard.

"Prices are trending slowly downwards at the moment, but our view is that this is really the start of the second leg of the correction, and we expect prices to fall significantly further," said Paul Diggle, economist at property consultancy Capital Economics. He is one of the economists that believes prices are due to fall another 20 per cent.

Miles Shipside of the property Web site Rightmove believes the level of house prices declining if at all will depend on the wealth and wages of the local population of an area. In some areas there will be increases in house prices while others will decline drastically. Where unemployment is the heaviest there will be declines and where those are doing well in this economy prices may increase. For instance, in London the house prices in more affluent areas jumped by 4 per cent according to some reports.

The future loss of equity is another reason a homeowner considering a remortgage might want to move sooner rather than later to secure a remortgage. It would help for a homeowner to become educated about the trend in house prices in their area in considering their current situation. Along with the possibility of interest rate increases, lenders pulling current fixed rate deals from the market, and house price declines analysts are urging a possible remortgage seeker to start looking now before the conditions of today change tomorrow.