The poll, which surveyed over 3,000 people last month, found that more than one third of people (36.5 per cent) feel their current property might be in negative equity by the end of the year.
However, these results compare with a recent report from Standard & Poor, which predicts that only one in seven (1.7 million) UK homeowners might face the reality of negative equity in the coming year if house prices continue to fall.
The Barnetts survey also found that one third of participants (33.6 per cent) had altered their plans for buying or selling a property in the next 12 months as a direct result of the credit crunch.
Tony Swift, conveyancing partner at Barnetts, said: “This is another clear indicator of the lack of public confidence in the resilience of the housing market and the encroaching impact of the credit crunch on decision-making.
“In my view the public perception of the state of the housing market is as important a factor in our future economic recovery as anything else. Where there is a lack of confidence, people who might otherwise have been in a position to invest in property will be reluctant to enter the market.
“Although the Government’s long-awaited interventions will have some impact, it is time for the industry to pull together and take action to help restore public confidence. House prices are cyclical in nature but the fall-out from a massive further fall in confidence is something we can’t afford to let happen.”
In response to the suspension of stamp duty on properties costing less than £175,000 for the next year, Barnetts is offering a discounted conveyancing service on properties sold for less than £175,000. The service is now available for £249.00 plus VAT and disbursements, which represents a £100.00 discount on the firm’s standard flat fee.
However, Mr Swift believes there is still more to be done. He said: “Whilst the economic recovery plans unveiled this week may have gone some way to reassuring first time buyers and struggling homeowners it has done little to address the bigger picture.
“The Government should be taking steps to ensure the capital markets are freed up, to allow banks to start lending again, thus freeing up mortgage funds. Until this happens, demand from house buyers will simply be put on hold. This could lead to a situation where prices explode again once the markets finally open up.”
