New research finds widespread anxiety about negative equity, with younger buyers and Londoners most exposed to fear of losses
Nine in 10 recent homebuyers in the UK are concerned that changes in the housing market could reduce the equity in their home, according to new research from broker firm Boon Brokers.
The study surveyed 1,000 homebuyers who had purchased a property using a mortgage within the past five years. It examined confidence in current property values, concern about equity erosion, and perceptions of negative equity risk.
Despite 58% of respondents believing their property had increased in value since purchase, 91% expressed at least some concern that market shifts could reduce their housing equity. Almost half (47%) said they were either very or extremely concerned, while only 9% reported no concern at all.
Separately, 44% of respondents said they believed they could enter negative equity during their current mortgage term — a finding that points to a disconnect between present confidence and future expectations.
Concerns about negative equity were most acute among younger borrowers. More than half (56%) of buyers aged 25–34 said they believed they were likely to enter negative equity during their mortgage term, compared with 26% of those aged 45–54, 21% of those aged 55–64, and 15% of buyers aged 65 and over.
| 18–24 | 25–34 | 35–44 | 45–54 | 55–64 | 65+ | |
|---|---|---|---|---|---|---|
| Very likely | 10% | 11% | 13% | 6% | 2% | 3% |
| Fairly likely | 25% | 45% | 38% | 19% | 19% | 12% |
| Unsure | 38% | 23% | 27% | 38% | 43% | 48% |
| Unlikely | 23% | 15% | 12% | 19% | 20% | 17% |
| Very unlikely | 5% | 6% | 9% | 18% | 16% | 20% |
Source: Boon Brokers
"These findings outline that younger homebuyers today are thinking far beyond simply getting onto the property ladder," said Gerard Boon (pictured right), managing director at Boon Brokers. "They're considering how future market conditions could affect the equity they build over the lifetime of their mortgage."
The Boon Brokers research also showed a significant regional variation. In London, 51% of respondents said it was either very or fairly likely they would enter negative equity during their current mortgage term — the highest figure among the cities surveyed. This compared with 49% in Nottingham, 48% in Birmingham, 35% in Manchester, and 27% in Leeds.
Levels of concern followed a similar pattern. In London, 57% of respondents said they were either very or extremely concerned about equity losses, compared with 50% in Birmingham, 49% in Nottingham, 34% in Leeds, and 30% in Manchester.
Source: Boon Brokers
When asked to identify their single biggest housing market concern, 33% of respondents cited higher mortgage repayments — the most common individual response. Negative equity ranked second at 24%, followed by falling property values (14%), inability to remortgage (11%), and difficulty selling (9%).
When the two equity-related concerns — negative equity and falling property values — are combined, they account for 38% of responses, exceeding the proportion attributable to higher mortgage repayments alone.
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