Homeowners have gone more years now than they had ever thought in which they would be losing equity rather than gaining it.  Unfortunately for those that recently purchased a home in the last few years, especially those that purchased right before the recession, the lack of growing equity is financially devastating.  As property values have declined a large number of homeowners have watched their mortgage debt out value their property.  When mortgage debt is higher than the property value the homeowner is said to be in negative equity.

A homeowner in negative equity is unable to remortgage.  They are unable to get a new deal and are therefore stuck on their lender’s standard variable rate (SVR) to where they converted to when their current mortgage deal ended.  It is a horrible loop of being unable to remortgage while facing a repayment schedule based on a risky interest rate. 

Homeowners are looking for a new boost in the housing market that would then give a boost to their property values and their equity growth.  Seasonal spring increases in buyers as well as the new government backed buying scheme for first time buyers called NewBuy is hoped to give the added movement in the housing market that will trickle down to the property value levels.  It is hoped that with low interest rates remaining available, a new scheme to help first time buyers into newly constructed homes, as well as attractive house prices that there will be more interest in the housing market than in years past.  The help needed to get economic recovery moving in the right direction depends on buyers returning to the housing market.  Homeowners needing to remortgage need them badly to return.