Britons set to fall into negative equity
Britons set to fall into negative equity
Tuesday 28th October 2008
In its latest Financial Stability Report, the BoE said about 500,000 homeowners are in negativity equity because of falling house prices and could be at risk of repossession.
A further 700,000 mortgage holders could be pushed into negative equity by further falls in prices, leaving borrowers trapped in homes worth less than the loan they took out to pay for them, the Bank predicted.
The mounting economic problems come as the average household debt in the UK, excluding mortgages, stands at £9,500, according to Credit Action's latest statistics.
Figures released by the Land Registry showed that the annual rate at which house prices in England and Wales fell in September was eight per cent, compared to the 4.6 per cent annual rate of decline in August.
Meanwhile, the BoE estimated that the world's financial firms have so far lost £1.8 trillion as a result of the credit crunch.
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