It would take a ‘hellish’ drop in house prices for homeowners to find themselves in negative equity, Norfolk estate agent David Hinton told Jeremy Vine’s BBC Radio 2 show yesterday, although down valuations remain a problem.

Speaking to stand-in host Tina Daheley during a segment on housing and mortgage market nightmares, Hinton told the newsreader when asked to gaze into his crystal ball what the likelihood of homeowners entering that territory was: “It’s very difficult to predict – the market has gone up a great deal in these last two years. It would be a hellish drop to be in that position. We can’t predict but I would find it incredibly unlikely.”

Hinton, Divisional Partner at Brown & Co LLP, opened a discussion for the presenter who was asking listeners about their experiences after the ill-fated mini-budget led to a rise in interest and mortgage rates.

COMPLICATION

Sellers, she said, had the added complication that ‘the housing market had slowed right down’ with some people predicting house prices could fall.

“That has led to some respective buyers getting cold feet. Estate agents saying it’s harder to get viewing in the first place.”

COVID

Hinton replied: “It’s changed a great deal over the last 18 months to two years – with Covid. We’ve noticed a bit of a change and not as busy as it was.

“But we do [in Norfolk] lag behind other areas in the country. It’s a lot less but there is still demand.

“Firstly, people have to look at their budgets more closely with the help of mortgage advisers.

“You have to take into account reduced mortgage [affordability] and increase in energy rates. You need to choose a mortgage product that will suit you in the long run. Banks are coming back to us and in some occasions down valuing property and that’s one of our problems but it’s difficult to estimate what’s going to happen in the future.”

You can listen to the debate here at 1 hr 07.