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Negative Equity and British Housing in the 1990s: Cause and Effect

Author

Listed:
  • Christopher Gentle

    (Centre for Urban and Regional Development Studies & Housing and Society Research Group, University of Newcastle-upon-Tyne, Newcastle-upon-Tyne, NEI 7RU, UK)

  • Daniel Dorling

    (Centre for Urban and Regional Development Studies & Housing and Society Research Group, University of Newcastle-upon-Tyne, Newcastle-upon-Tyne, NEI 7RU, UK)

  • James Comford

    (Centre for Urban and Regional Development Studies & Housing and Society Research Group, University of Newcastle-upon-Tyne, Newcastle-upon-Tyne, NEI 7RU, UK)

Abstract

This paper is concerned with the emergence in Britain in the early 1990s of a large group of domestic mortgage holders with negative equity (i.e. whose property had fallen below the value of the mortgage advance used to purchase that property). The emergence of negative equity is traced to the conjunction of the long-term trend towards wider home-ownership in Britain and the effects of deregulation of the financial system in the 1980s. Using individual records from a major building society, the temporal, geographical and social distribution of negative equity is assessed. The results suggest that negative equity was far more likely to affect certain social groups living in particular places and that these appear to be the people least well placed to 'help themselves' out of debt. The concluding section attempts to draw out some of the policy conclusions from these findings.

Suggested Citation

  • Christopher Gentle & Daniel Dorling & James Comford, 1994. "Negative Equity and British Housing in the 1990s: Cause and Effect," Urban Studies, Urban Studies Journal Limited, vol. 31(2), pages 181-199, March.
    • Handle: RePEc:sae:urbstu:v:31:y:1994:i:2:p:181-199
    DOI: 10.1080/00420989420080191
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    References listed on IDEAS

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    1. Leigh Drake, 1989. "The Building Society Industry in Transition," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-09680-0.
    2. Michael Moran, 1991. "The Politics of the Financial Services Revolution," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-37789-9.
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