More than two-fifths of recent homebuyers believe they could fall into negative equity during their current mortgage term, according to research from Boon Brokers.

The survey of 1,000 people who bought a mortgaged property within the past five years found 44% considered negative equity either fairly or very likely.

Concern was particularly pronounced among younger borrowers, with 56% of those aged between 25 and 34 believing they could owe more than their home is worth at some point during their mortgage.

The findings reveal a marked divide between perceptions of current property values and expectations for the future, as only 17% of respondents believe their home has fallen in value since purchase.

EQUITY ANXIETY WIDESPREAD

Nine in 10 respondents expressed some concern that housing market changes could reduce their equity, including 47% who were very or extremely concerned.

Only 9% reported having no concerns about their housing equity.

Despite this anxiety, 58% believe their property has increased in value since they bought it, while 24% think its value has remained broadly unchanged.

Gerard Boon, managing director at Boon Brokers, said younger homeowners were looking beyond the immediate challenge of getting onto the property ladder.

He added: “They’re considering how future market conditions could affect the equity they build over the lifetime of their mortgage.”

AGE DIVIDE EMERGES

The perceived likelihood of negative equity declines substantially among older borrowers.

Some 51% of buyers aged between 35 and 44 believe it is likely, falling to 26% among those aged 45 to 54 and 21% for the 55-to-64 group.

Only 15% of buyers aged 65 and over expect to experience negative equity during their mortgage term.

The research did not establish why younger borrowers were more concerned, although recent buyers may have smaller equity cushions and greater exposure to higher loan-to-value borrowing.

LONDON FEARS HIGHEST

London recorded the greatest concern among the cities examined, with 51% of respondents believing negative equity was likely.

This compared with 49% in Nottingham, 48% in Birmingham, 35% in Manchester and 27% in Leeds.

Some 57% of London respondents were very or extremely concerned about losing equity, while only 5% expressed no concern.

REPAYMENTS TOP BORROWER CONCERNS

Higher mortgage repayments remained the most frequently identified individual housing market concern, selected by 33% of respondents.

Negative equity followed at 24%, with falling property values cited by 14%. A further 11% were most concerned about being unable to remortgage and 9% highlighted difficulty selling.

Combined, negative equity and falling property values accounted for 38% of responses, placing equity-related worries ahead of monthly repayments overall.