Lots of homeowners may have been unaware of the looming credit crunch when they bought a home six or seven years ago, and have been left with the shackles of negative equity as a result.
For those who are happy to remain in their current home for a number of years to come, being in negative equity might not prove to be a millstone around their necks. But for those who need to upsize as a result of a growing family or because they need to move for work reasons, the fact that they paid more for their property than it is now worth could be a real issue.
So what should you do if you realise you are in negative equity. Firstly, don’t panic! Consider whether you can make any adjustments to your home which will mean you can stay in it until the property market picks back up. If you have recently had a baby or you have two children who can no longer share a room, could you think about converting your loft into a new bedroom? Or perhaps there is space at the back of the house for an extension? Could you work with the layout of the property to perhaps make better use of the space you have? Perhaps you have used one of the rooms as a study which can now be changed back into a bedroom? It’s important to really think about all the options if it’s likely that you would not receive as much money for the property as you paid for it.
If the options above just aren’t right for you, why not think about letting out your own property and renting another? This may be a sensible option if you are currently in a flat but need to move into a house for family or work reasons, for example. You may find yourself letting out your flat in Bury St Edmunds and looking for a house to rent in Haverhill, which would mean that you could ride out the negative equity but still have a larger property in which to live.
If considering this option, it’s important to get some good advice from a reputable local lettings agent. Make sure you get quotes from a number of agencies to ensure that you get the highest level of rent possible for your property to put you in the best position for your own move. The agency will be able to help you present your current home in its best light and highlight its most important features, such as proximity to transport links, local amenities and so on.
Negative equity may feel like a scary prospect but please don’t get disheartened. There are many options you can consider to ensure you are where you want to be.
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