Many homeowners are totally unaware of the fact that house prices declining in their area are eating up equity they have in their homes. For some that mortgaged at a high loan to value level in recent years they may likely be close to negative equity. Forecasters have called for house prices to continue declines through 2011 and as they do, homeowners will be losing equity making remortgaging hard on any of them wanting one.

In the Land Registry data from February, the most current data available, house prices in England and Wales had fallen by 0.8 per cent taking the average house price down to £162,215. There has been a 2.9 per cent decline in house prices from the £166,978 peak found in August 2010. This is a monetary decline of £4,763. As house prices decline, the value of homes in the same areas of those declines fall as well taking equity away.

Homeowners with negative equity cannot remortgage. For those with a small amount of equity they will find the best remortgage rates out of reach. The only chance for these homeowners is to pay down debt to build back the equity lost due to declining house prices. There are areas with rising house prices but the majority of areas are seeing declines.

Howard Archer, Chief European & UK economist at IHS Global Insight, remarked on the Land Registry figures stating: "We suspect that house prices will fall by around 5% in 2011 and end up losing around 10% from the peak levels seen in 2010.

"We believe housing market activity and house prices will remain under pressure for some time to come from high and likely to rise unemployment, negative real income growth, the increasing fiscal squeeze, very low consumer confidence, and ongoing difficulties in getting a mortgage for many buyers, particularly first time buyers."