Member Article

Make negative equity positive, property expert tells Britain’s largest news channel

Make your negative equity positive – that’s the message a property boss had for the 16% of North East homeowners whose houses are worth less than their mortgages in an interview with Britain’s largest news channel.

In an interview broadcast on the BBC News Channel, Ajay Jagota of KIS Lettings advised homeowners enduring negative equity to consider becoming “accidental landlords” – renting out their properties until their value rises.

Ajay was responding to figures showing that 16% of North East homes are currently valued at less than the mortgages owed on them.

The figure is just 1% in London and the South East, with only Northern Ireland recording a higher total than the North East.

Statistics from the Land Registry show that property values in the region have fallen by 6% since the summer.

Ajay Jagota believes househoulders can make their negative equity positive by becoming so-called “accidental landlords”, buy-to-let investors who never bought to let.

The firm manages properties for over 700 landlords from branches in South Shields, North Shields, Sunderland and Welwyn Garden City and was named Letting Agent of the Year at the Landlord and Letting Awards 2013.

Ajay said: “For all the talk of a housing bubble, property prices in the North East continued to fall last year and even now are at best flat. Some people have predicted that it will take at least 4 years for property prices to return to their 2008 peak.

“With almost one in five North East homes in negative equity a lot of people are left in a very difficult situation, especially when they have to sell when relationships break down or they need to move up the property ladder as children come along.

“I would say as many as a quarter of the owners of properties we manage now are what we call ‘accidental landlords’, people who never planned to rent out a home but have been left with no other choice – nothing like the popular image of a buy-to-let investor.

“Renting the property out until market conditions are more favourable for selling isn’t just their salvation, it can prove very rewarding – the short term fix of today sometimes even becomes the pension plan of tomorrow, especially when supported by a quality lettings agency.

“It’s the only way to make your negative equity positive”.

This was posted in Bdaily's Members' News section by Ajay Jagota .