Fact: Experts claim that despite the current house price downturn house prices will actually rise by as much as 25 per cent over the next five years.

Not surprisingly, given the bad publicity over falling house prices, many people are becoming concerned about the effect of a possible recession and at losing money on their homes.

This fear was stoked by a recent report from the Chartered Institute of Surveyors confirming the drop in house prices across the UK.

But are they worrying unnecessarily? Greenhill Finance's blog moderator Claire thinks so.

"A lot of people are worried that falling house prices will put them into negative equity - where the value of their homes is less than the amount of their mortgage," says Claire.

'But the truth is that for the majority the possibility for negative equity is pretty remote. Most homeowners are still way ahead of the game especially if they have been in your home for more than a few years.'

Claire points out, for example, that according to Nationwide Building Society the average price of a house has risen from £77,698 in the first quarter of 2000 to £179,363 for the same quarter of 2008.

The BBC's programme 'Truth About Property' also recently did their own report using HomeTrack and found that the average houseowner still had some £167,000 of equity in their homes.

So the view from Greenhill Finance is that the present financial situation is not so much a recession as a slowing down of a market that was well overdue and better times will return once the market has stabilised.

This view has been reinforced by reports, widely quoted in the national press, from the National Housing Federation predicting an actual increase of 25 per cent in house prices over the next five years, starting in 2010.

David Reid, a senior advisor at Greenhill Finance, explains: 'Today's market has been over-inflated due to a number of reasons: the ease of gaining credit, better selling by estate agents, and low interest rates. This meant more readily available money coming into the market pushing up prices.

"Those easy mortgages are now nowhere to be seen due to the credit crunch and we are seeing truer prices. There may well be a stiffer downturn yet in house prices but people in many cases have already made massive amounts of money on their homes."

That's why David has doubts a recession is on its way. He believes that most people are more likely to remain in their present homes and invest what they can in making their homes nicer through remortgaging or taking our secured loans.

"Certainly there will be an adjusting of what people's estate is worth,' he says. 'It was always going to happen, the way things were could never carry on. But for the most part homeowners have done very well from property, and probably still will."

And he adds that even those with what might be regarded as a bad credit rating still have access to credit if they own their own homes.

"A loan secured on your home is still very much a viable option," he says.

Author's Bio: 

Greenhill Finance can help select the best secured loan with money in the bank within 21days. Call 0800 916 4148 or visit www.greenhillfinance.co.uk.

Greenhill Finance's guru Claire has an advice blog on a recently launched website www.bad-credit-homeowner.co.uk specifically to help people with problems over finance. Features include the direct online facility to apply for a loan or remortgage.