What Is Negative Equity and What Does It Mean for a Sale?
Negative equity generally means secured borrowing is greater than the property's current value. Selling can therefore require careful discussion with the lender and professional advisers.
How negative equity arises
Negative equity generally means secured borrowing is greater than the current property value. Selling can therefore require careful discussion with the lender and appropriate professional advisers.
Why a normal sale may not clear borrowing
The right route depends on what you are trying to achieve, the properties involved and the practical constraints around them. Comparing the available routes before committing can make the decision clearer.
Lender discussions
This is one part of the wider portfolio picture. Look at the issue alongside your properties, finances, tenancies and objectives rather than treating it in isolation.
Portfolio context
This is one part of the wider portfolio picture. Look at the issue alongside your properties, finances, tenancies and objectives rather than treating it in isolation.
Do not assume the debt disappears
This is one part of the wider portfolio picture. Look at the issue alongside your properties, finances, tenancies and objectives rather than treating it in isolation.
Professional advice
This is one part of the wider portfolio picture. Look at the issue alongside your properties, finances, tenancies and objectives rather than treating it in isolation.
Practical takeaway
Negative equity is different from simply having a small amount of equity. The exact position must be established before deciding how to proceed.
What should you do next?
You do not have to decide before you understand your position. If a portfolio review would help, request a confidential portfolio valuation with no obligation to sell.