Over the course of the last eighteen months or so, the average price of a property in the UK has continued to fall steadily as the economy slows down and banks and building societies are still extremely reluctant to grant secured loans to potential borrowers.

Official figures show that house prices have now fallen for 16 consecutive months and that during this time, average prices have reduced by more than 10 per cent across the country, in some areas this drop has been even larger.

With prices falling by another 1 per cent in January this year, many borrowers with secured loans are now starting to worry about the prospect of negative equity on their home. This is where the outstanding balance on their loan exceeds the value of the property itself.

New research has shown that around 25 per cent of homeowners are now bothered about negative equity and of these, 11 per cent bought their home when prices were at their peak and therefore have not enjoyed any growth on the property prior to the falls.

Another 8 per cent have taken out an interest only secured loan on a high loan to value ratio and these are the borrowers most likely to suffer, as they are not reducing their loan balance.

Of those people interviewed for the survey, around 29 per cent said that they bought their home before house prices increased as dramatically as they did and therefore still had plenty of equity in their home, despite recent drops and 16 per cent of homeowners expect the housing market to settle down over the course of this year.

Just over a quarter of people said that they are not realistically bothered about house prices, just that they are still able to keep up with the repayments on their secured loan and in the present economic situation, this would seem to be a sensible approach.