And Tom Cardwell (Director at CD Fairfield) believes people should stop blaming themselves for being caught-up in negative equity.
“If it is an issue, you have to deal with it sooner rather than later. Hopefully, the stigma attached to the issue has reduced over time.
“We are very active in putting out good content in terms of what is happening in the industry and where the mortgage market is at.
“What I really mean by that is would have been very difficult to purchase a property 10 or 12 years ago and not be in negative equity today.
“So it wasn’t that people in negative equity have made some horrendous financial choice, or some reckless financial decision.
“They simply bought a property at the wrong time. It was just a matter of timing. First-time buyers in the last six or seven years don’t have this problem. They don’t have to worry about it.
“It is those who have re-mortgaged or purchased a buy to let property. Or purchased their first home during those boom years.
“It was all-encompassing. And it certainly is not something that was restricted to those with low incomes. We have clients where the household income was well in excess of one hundred thousand pounds.
“But they still have a debt issue and it is something that they will have to address. The first thing to do is recognise there is a problem.
“The second thing to do is seek some assistance and the third thing you have to remember is that the client was a victim of an economic crash and it is not something they have done.
“If someone is worried about negative equity? No matter what the level of their negative equity they should get in touch with us.
“We can put their mind at ease. We can explain to them exactly what their position is and we don’t engage in flannel or false hopes. In an empathetic fashion, we tell people where they stand.”
And Cardwell added: “Negative Equity is only a problem if you have to deal with it or do something about it.
“If you are in a position where you can repay 100% of your mortgage in the remaining term and you have no desire to move, then you don’t have to redress your negative equity problem in the short term.
“They might want to re-negotiate the terms of their mortgage and that is something we can do and help clients with.
“But predominantly the clients that are approaching us are ones that can afford to service the mortgage debt – normally an interest-free mortgage – on a month to month basis.
“But the level of negative equity in terms of repaying 100% of that debt is insurmountable in the remaining term of their mortgage
“Also there could be other factors that would be part of the equation. Usually, clients would come to us and they are first time buyers in the boom years between 2004 and 2008.
“They purchased a one or two bedroom house, or maybe even a smaller three bedroom property and they had no children at the time. The house suited them and was perfectly affordable.
“Now they have had a few children and now the house is impracticable for them to stay in that property.
“It is just not big enough and an example I use is that if the Housing Executive had been housing them – they would have been rehoused.
“But because it is their own property they are supposed to grin and bear it. But I don’t think that is reasonable?
“The good thing in our terms of our relationship with lenders and they will recognise that, even though a lenders first position is not to help a client in that position.
“But that is not their final decision and there is a responsibility from lenders to treat customers fairly. And putting that across in a compelling way can bring lenders to the table,” he added.
Speak to Bob today on 0161 660 4403 to see how we can help you.