According to recent
mortgage market data from the Council of
Mortgage Lenders, as many as 900,000 homeowners have been
pushed into
negative equity . Negative
equity occurs when a borrower sees the value of their
property fall, increasing their
loan to value rate until the
loan is worth more than the house.
The proportion of
mortgage borrowers in negative equity varies considerably
throughout the country, however. Some one in 10 owner-occupiers are
in negative equity in the North East, for instance, whilst in East
Anglia the figure is more like one in every 100.
The CML blamed the significant downturn in the
housing market for pushing borrowers into negative equity.
Furthermore, reports from alternate sources put the figures far
higher. Those with
mortgage loans who are facing negative equity will now be
looking to weather this tough economic period.
