The report, Positive about housing equity, said that among home-owners who have moved house in the last five years, the average outstanding mortgage is £76,000 but the average level of unmortgaged housing equity is £81,000, or £2.2 trillion in total.
This figure far outstrips the total value of the eleven and a half million mortgages in the UK, worth around £750 billion.
As such, house prices need to fall by 22 per cent before people who became first-time buyers in 2002 become exposed to negative equity.
Unsurprisingly, first-time buyers generally have less housing equity than movers. However, out of the 359,000 first-time buyers in 2003, only 27 per cent of these, or 97,000, took out loans with less than a 5 per cent deposit, which is one per cent of all mortgage holders.
According to the authors of the report, Jennet Vass and Bob Pannell, “the numbers of people likely to experience negative equity would be modest compared to the 1.7 million of the early 1990s.”
The report said: “Lenders have also developed policies and procedures to enable households with negative equity to have portable loans. As a result, any future period of negative equity should have a lesser impact on the operation of the housing market."
