The recession resulted in many borrowers throughout the UK experiencing negative equity. Most of the UK has been able to claw its way back to property values which are close to pre recession figures but this is not the case in Northern Ireland. Recent figures disclosed by the BBC indicate that of those homeowners who have taken out a mortgage since 1995 some 41% are in negative equity.
If you have substantial negative equity you are effectively prevented from moving house and even if your monthly mortgage payment is currently affordable you may find yourself paying up to twice what the current rental payment is on a comparable property.
It is anticipated that Mr Carney will raise interest rates by perhaps up to 1.5% in the next two years. This will of course be reflected in mortgage rates and is likely to result in more repossessions in the Northern Ireland property market. That will inevitably have a dampening affect on property values and without property inflation the spectre of negative equity will remain.