Poor equity is 'trapping' a third of mortgage owners

Date:Friday 14th August 2009
Author: Max Freedman

A third of the country's residential mortgage holders currently have poor equity and this could stop them from moving homes, according to a mortgage expert.

Mortgage broker John Charcol says that up to 35 million people have equity below 15 per cent or in negative figures.

Ray Boulger from John Charcol said under these circumstances people often could not afford the minimum deposit on a new property and that this was causing a serious problem in the market.

"When most people move they rely on the equity in their property to provide the bulk of the deposit required for their new property," he said.

This leaves customers having to accept high interest rates or being turned away if their credit score is not high enough.

Mr Boulger recently made a statement about how remortgage activity had done well by taking up just over half of total business in a review of market activity in June.