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Negative equity to affect one in ten homes
18/04/2008 10:54:00
Up to one in ten households could face negative equity within the next two years, according to new research.
Findings from a study by investment bank Morgan Stanley revealed that house prices are expected to fall by 15 per cent within the next two years and pushing 1.2 million consumers into a position where they owe more money on their mortgage than their home is worth.
Speaking to the Daily Telegraph, the co-author of the study, David Miles, said: "These figures will understate the magnitude of negative equity as we have excluded lending in 2008."
The findings may have "excluded future lending which could also fall into negative equity as (house) prices decline throughout 2008 and 2009," he told the news provider.
According to the report, predicted net lending is expected to be down to £65 billion this year from £108 billion in 2007.
Meanwhile, chancellor Alistair Darling has pledged government support to the housing markets, saying that it will do whatever it can to ensure it remains buoyant.
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