Negative equity 'will be a major issue for homeowners'

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Widespread reports of the continuing turmoil in the UK property market may fuel increased demand for buy-to-let properties.

According to Paul Holmes, operations director of Firstrung, the current house price falls being observed in Britain are going to push many homeowners into negative equity.

He said that this problem is likely to affect those that have purchased a house "over the last couple of years", although the risk of ending up in negative equity depends on a homeowner's individual circumstances.

Mr Holmes commented: "Negative equity is going to be an issue without a shadow of a doubt for everybody who bought over the last couple of years."

With fears that house prices will fall even further this year, those who previously planned to get onto the property ladder may well be discouraged from making their first house purchase.

In turn, this could seean increased number of people opting for private rented accommodation, spelling good news for buy-to-let landlords.

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