It’s tough to have lived in this country without having heard about negative equity. Most people are familiar with those two words.
But given that it is something we have heard time and again on TV and radio or read in newspapers, an amazing number of people don’t know what negative equity is, how it came to be, who is responsible for what has happened, the effect it can have on individuals, families and entire communities and whether or not there is a solution to the problems it creates.So let’s go through those things step by step.
Negative equity means your home is worth less than the loan mortgage currently outstanding on it. In other words, if you were to sell your home at this stage, the price you would receive would not be enough to clear what you owe the lender.This means that if you owe the bank £120,000 but, because of a slump in house prices, that property now is worth just £90,000, you have £30,000 of negative equity.
Currently, 41% of mortgages in Northern Ireland are affected by negative equity. That’s the highest percentage for any region in the UK with some 68,000 Northern Ireland households caught in the trap. While they did not cause the crash in prices and therefore are not to blame for what happened to the market in 2008, nevertheless those people are trapped as a result of it.
Who is responsible for what has happened?
Big question, but the answer basically is a combination of greedy speculators and irresponsible lenders with the malaise having spread across the Atlantic from the USA. Uncle Sam sneezed and the rest of us caught cold. The rest is history.In the mid-noughties greedy speculators forced the price of property up and irresponsible lenders fuelled the fire. Together their actions in tandem with some pretty reckless borrowing and spending by the general public – contributed much to the economic slump of 2008 which in turn saw property prices plummet.
What effect has negative equity had on people?
In a word, the effect has been, and still is, massive.
Emotionally, people have endured anxiety, depression and a sense of hopelessness. Materially the effects some have suffered include repossession and/or bankruptcy.
In some cases entire communities have been victims as a result of everyone having bought houses in that locality at the height of the property boom. Now neighbour after neighbour shares the same problem their homes and those of everyone around them are in negative equity.
So is there a solution to the problem?Yes.
Negative Equity NI’s raison d’tre is to provide answers and help for just such people. Staffed by experts in the law, property and banking, they offer in-depth guidance, advice and as part of an all-inclusive service which culminates with them negotiating a settlement of your debt with the lender.
The key words in Negative Equity NI’s mission statement are:
Our only aim is to write off the maximum amount of your property debt possible, sowe’vebuilt our team and our business around you, our customers’.
That summarises their ethos, that’s their promise.
They know banks, banking and bankers inside out. That’s not surprising – a number of those on the Negative Equity NI team worked in the banking industry. Because of their years of experience on the other side of the counter, not only do they understand what banks want they also know what they will accept.They know, too, that bankers don’t have time to waste listening to pie-in-the-sky proposals which have no basis in law, lack substance and are not underwritten by a thorough knowledge of how the world of money operates.
They will, however, listen to and negotiate with those whose expertise, reputations and integrity demands their respect.Negative Equity NI boast just such a line-up.
Armed with exceptional experience and knowledge gained in financial services and property investment, Tom Cardwell is an expert in mortgage debt restructuring as well as having a fully up-to-date understanding of the current Northern Ireland property market. Crucially, he enjoys the total respect with many of the high street lenders’ big decision-makers who recognise him as being thoroughly professional.
John McMaster spent almost 40 years with the Northern (now Danske) Bank and that vast wealth of experience is mirrored by the regard in which he is held in banking circles.
Natasha McGurk worked for HSBC for eight years, majority in the fields of mortgages and related products. Having been a mortgage manager, she then spent three years as HSBC’s regional trainer.
Kyle Waterworth worked for Moore Stephens Chartered Accountants and KPMG in the insolvency and restructuring sectors following which he was employed within the RBS Capital Resolution Group (Ulster Bank), dealing with customers who had distressed loans’ of up to £15m.
Those are the sort of people you want to have working on your problems and negotiating with your lenders, saving you tens of thousands of pounds in the process.
Their standing, their records and, vitally, the fact that their work is regulated by the Financial Conduct Authority gives clients the confidence to allow them to mediate on their behalf and to achieve debt write-off or wholly manageable re-structuring.
Would you like more info on how Negative Equity NI can help you? Speak to one of our team on: 028 9023 6074 or click here to arrange a free call back.
How is home equity calculated?
Home equity is calculated by subtracting the amount you still owe on your mortgage from the current market value of your home.
Can you have negative equity?
Yes. With standard loans, your home equity will increase over time. With negative-amortizing loans — a loan with monthly payments less than the interest rates — your equity decreases over time as your owed balance increases.