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The Harvey files 2: housing market part 2

By Harvey Cole  

The great fear of homeowners is that a drop in prices will leave them in the state of negative equity—when you can only sell your home for less than you still owe on it—that afflicted so many at the end of the 1980s. But the joys of positive equity—being able to realise a net capital gain—are not unconfined. The current state of the housing market does not necessarily benefit homeowners to the extent we tend to assume.

Suppose, back in 1992, you had just managed to raise the resources to buy your first house, for £100,000 (or, more likely,…

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