ABSTRACT
For Canada and the USA the only evidence of negative equity appears to be anecdotal, with extensive searches in both countries failing to produce any relevant literature. Negative equity is hypothetical and does not become a reality until a property is sold. N. Kennedy and P. Andersen describe developments in house prices in fifteen industrialised countries between 1970 to 1992, asserting that 'in the majority of cases volatility appears to have increased in the 1980s. Holmans and M. Frosztega's study of negative equity analysed data from the 1992/93 and 1993/94 General Household Survey to estimate the number of mortgaged owners who bought their homes in 1987 or later with negative equity. Negative equity has been recognised as a problem mainly affecting Southern England, particularly the South East. Whilst modest house prices might lift the majority of borrowers out of negative equity a rump of properties and people with the most intractable problems may be left behind.
