Loan Debts Exceed House Price for More Homeowners

Fri, 06 Jun 2008

New figures from Citigroup have shown that a quarter of a million people have fallen into negative equity since the turn of the year. The figures highlighted a 7 per cent drop in house prices since the autumn meaning that an increasing number of people now owe more than their properties are worth.

The bank’s chief UK economist, Michael Saunders, also forecast that as many as a million people could fall into negative equity by the end of 2009, if house prices fall by 15 per cent or more as predicted.

With the economy slowing, the Bank of England would usually decrease the base rate, though having done this three times in the past few months and with inflation on the rise, no decrease is expected at its monthly meeting this week.

The news comes as borrowers face increasing costs almost across the board, with not only mortgage prices continuing to rise, but also gas and electricity costs. Abbey and the Woolwich have already increased their fixed loan rate last week, while the Cheshire building society and the Post Office are expected to increase rates this week.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

 

 

Credit Crunch Savers
Amex Cash Back
Credit Card
Get 5% cash back on purchases with Amex
Virgin Credit Card
0% APR on balance transfers for 16 months
Tesco Insurance Sale
50% discount on car and home insurance.
Offer ends 7th Jan 09
Post Office Instant Saver
Protect your savings with the Post Office saver

Paying Too Much?

7 out of 10 people are paying too much for their mortgage. To find out if you're one of them click here or fill out a FREE no obligation enquiry form