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Reaching negative equity is a ‘very real possibility’
AS national home prices soften, how big is the risk that first home buyers using the government’s 5% deposit scheme will be forced to sell at a loss? Low-deposit home buyers are the most vulnerable if prices fall but experts say widespread negative equity remains unlikely unless there is a sharper housing downturn or rise in unemployment. Negative equity occurs when a property’s value falls below the mortgage owed and generally only becomes a problem if owners are forced to sell due to factors like job loss or relationship breakdown. Real estate commentators, including To
