Went through the same thought process nearly five years ago. Was lucky in that I bought just after the bottom of a price dip and the house has probably gained 40% in those five years (from 103k to about 140-ish) and that I've kept the same job (well, different roles in the same company) which is 3.5 miles away. Could have made a lot more on the house if I'd bought one of the other options at the time but this house was nicer/bigger (there was a bigger house in a worse area and a smaller house in a nicer area so it was just finding the one that I liked best). The plan was to live here for at least five years (or to own the house that long if I got transferred to the US office, and rent it out) but inertia and rising house prices mean that I'll probably hang on here a while longer and convert the loft or replace the crap conservatory with something that's useable year round, extends the kitchen and provides a downstairs w.c.) Won't add *that much* to the house value, but will add a lot to the house useability (for example the extra loo will be great when my lodger is using the bathroom in the morning and I wake up with the usual requirement apon waking!)

The problem with negative equity the last time around came because house prices actually sank in many areas (by upto 30% in some areas) so the fact that you're ok now and ok next year doesn't mean you're safe from negative equity unless you can pay off more of the capital than the house price has dropped at the time you need to sell. If you don't need to sell then you can hold on and hope the prices recover (as they always have so far!) or that your salary will keep increasing (with inflation and promotion) reducing the amount of your salary required to pay the interest and leaving more to pay off capital or invest, and other sources of revenue (lottery wins, inheritances, stock options, marrying a millionaire, long term investments) show up and help to pay off the house.