Get ready for NegEq

There  is a new report almost everyday now about the state of the economy and its effect on house prices. The latest one from the surveyors point towards a 1990s style blitz on house prices. The spectre of negative equity once again looms large on the horizon.

Negative equity is when the mortgage on your home is more than what the house is worth. Although as long as you keep paying the mortgage it’s not such a massive disaster- you’ve still got a place over your heads. Admittedly it would be a bit of a bummer if all that equity you were banking on for your retirement suddenly became a minus amount.

I’m OK though. I couldn’t care less about house prices. I bought my house 9 years, extended it 2 years ago and now I’ve got just one year left on the mortgage. Having made the decision to stay put and build a few extra rooms onto the back of the house, I’m happy with my lot. House prices can tumble all they want and I won’t be bothered.

The New Labour economic miracle bubble bursting will be painful for a lot of people who mortgaged to the hilt- up to 5 or 6 times salary in some cases. It will hurt those who thought that buy-to-let was a win-win situation. It will definitely sting for those in negative equity who were unable to keep up their repayments, get repossessed by the bank and then find that they are still in debt to their eyeballs because their house was worth diddly squat.

However it’s not all bad. There’ll be a lot less crap TV about houses and renovations. Sarah Beeny and Kirsty Allsopp will disappear from our screens hopefully. I can’t wait.