- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 04 Jul 2018
Equity in property
In the context of residential property it is a measure of the difference between the market value of a property minus what the owner still has to pay on the mortgage. There are many variables but generally over a specified period (often 25 years) the equity in the property is gradually transferred from the lender to the owner.
Market value can fall in the early stages after purchase. In extreme cases this can result in the owner having negative equity and the lender foreclosing the mortgage arrangements and repossessing the property. The lender can then sell the property to recover the loan and retain the owner’s deposit if there is a shortfall.
Equity in property development investment is similar, following the notion of redemption when the share is valued as the difference between the market price of the property and the amount of any mortgage or other encumbrances. If the asset value of the entity exceeds all its liabilities, including initial equity capital, there will be a capital gain for the investors.
 Find out more
 Related articles on Designing Buildings Wiki
Featured articles and news
How can these valued spaces be reused?
Partnership avoids the need for listed building consent.
Connecting building design from inception to completion to operations.
Gregor Harvie predicts interoperability will be construction’s Uber moment.
Expert commentary and insight.
Guidance offered for stained glass window maintenance.
Define need before determining viability.
Framework examines social value of projects.
RfX or Request for [fill in the blank].
Organisation establishes Equality, Diversity, Inclusion taskforce.
Government announces plans for new building projects.
Outsourcing method to procure and manage supplies.
Joint support of Local Authority Historic Environment and Conservation Services.
The Chesapeake Bay Bridge-Tunnel is an outstanding achievement.
Buildings of the interwar years. Book review.