Thousands 'face negative equity' - BBC News

Close to 150,000 householders who took out mortgages since early 2007 may confront negative equity, research suggests.

According to a CACI study for the Daily Telegraph, one in eight of 1.2 million who bought a place since then owe more than than their place is worth.

If a house loses its value it is not necessarily a job unless the proprietor have to move, remortgage, or cannot afford to pay the mortgage.

UK terms drop 0.9% on norm in June, according to recent Nationwide figures.

Risks increased

The CACI analysis also proposes that 360,000 mortgage holders could be in negative equity by the end of 2008 if house terms autumn by 20%.

A recent BBC study - based on information from the Council of Mortgage Lenders - revealed that more than than 23,200 people who took out 100% mortgages in the twelvemonth to 31 March could confront negative equity.

In a rise marketplace Banks are prepared to impart 100% mortgages as there is small hazard of them not getting their money back.

But as terms have got got got got been falling, the hazards have increased and loaners have been turning borrowers away if they make not have a deposit.

Last hebdomad Nationwide said house terms drop for the 8th calendar month in a row in June, with terms now 6.3% less than a twelvemonth ago.

It said the norm place now costs £172,415 and is £13,629 cheaper than at the top of the marketplace in October last year.

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