31
Jul
S&P warns of negative equity risk
If house price falls continue at their present rate 1.7 million
British homeowners could be at risk of negative equity, Standard
& Poor (S&P) has claimed.
According to today's house price figures from Nationwide, property
values dropped by 1.7 per cent in July, the ninth consecutive month
of falls.
If this carries, those who purchased their property at the height
of the boom in 2007 with high loan-to-value ratios, are at the
highest risk of negative equity.
"The downward trend in UK house prices now seems well established
and we expect prices to continue falling in the near term," S&P
said in a statement.
If the number of people experiencing negative equity does climb to
the level the group has predicted, it will begin to equal the
housing crisis of the early 1990s.
Negative equity occurs when the amount outstanding on a person's
mortgage is higher than the value of their home.
