New buyers told to sit tight

Posted: 16 May 2008 11:59:17 GMT

First-time buyers have been advised to sit tight if they find themselves in negative equity.

First-time buyers have been advised to sit tight if they find themselves in negative equity.

According to Firstrung, new buyers should not panic as prices will pick up again in the future.

Many buyers, particularly those who purchased in the last two years are concerned that the value of their properties will drop below the value they paid for them.

However, Paul Holmes, operations director at Firstrung, said that this should not be a problem for most people.

"Do you stay living in your house because it has lost £20,000 in value? Of course you do because it’s your home and you know eventually you will pay that mortgage off," he commented.

"Perhaps a £20,000 dip in year three and four of your mortgage is more than outweighed by the fact that in year ten to fifteen of your mortgage you will be in positive territory and you can see a finishing line for paying off your original debt.

"[If] you find yourself in a bit of negative equity weather the storm if you can," added Mr Holmes.

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