UK houses prices to tumble a further 17 percent

Anyone who was in the UK and affected by the negative equity crisis in the 1990s could be seeing the same again within the next 12 months, according to the ratings agency Standard & Poor’s.

It could be as many as one in seven homes that have more owing on their mortgage than the property is actually worth. Standard & Poor predict 1.7m household will be in negative equity, that’s a massive jump of 17 percent from the 70,000. This is the same decrease as in the housing crash in the early 1990s.

It said by S&P that it’s the fastest rate house prices has dropped in recent months on record, but the fact we had such a property boom means only a fraction of homeowners 0.6 percent are in negative equity. The average homeowner owns 46 percent of their property leaving just 54 percent with a mortgage.

Every percentage point fall in house price makes a massive effect on the borrowers in fact for every 0.5 percent to 1.5 percent makes around another 60,000 to 180,000 homeowner into negative equity.
New figures will be released by Nationwide, one of the biggest mortgage lenders tomorrow.

Source: Guardian

Read more about UK house prices here.