2.5 million people facing negative equity

geoffky

One homeowner in every five could become ensnared in negative equity as the recession bites, the City watchdog has warned.

House prices may decline by 30 per cent from peaks reached at the end of 2007, the Financial Services Authority said, leaving 2.5 million people sitting on homes worth
less than their mortgage.

Some 500,000 of these would be holders of buy-to-let mortgages, which the FSA singled out as an area of major concern.

http://www.dailymail.co.uk/news/arti...-watchdog.html

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carolt

Oh no. Gutting about the BTL mortgage holders, isn't it.

Couldn't happen to a nicer bunch.

JonnyBravo

carolt wrote: »

Oh no. Gutting about the BTL mortgage holders, isn't it.

Couldn't happen to a nicer bunch.

Thanks for your concern.

IveSeenTheLight

carolt wrote: »

Oh no. Gutting about the BTL mortgage holders, isn't it.

Couldn't happen to a nicer bunch.

Yeah, focus on a possible 500,000 BTL LL's and forget about the possible 2,000,000 Owner Occupiers (4 times the amount of BTL LL's).

Remember the report says "House prices may decline by 30 per cent from peaks"

It would be interesting to see the souce as it seems a little re-hashed to me

mower5

IveSeenTheLight wrote: »

Yeah, focus on a possible 500,000 BTL LL's and forget about the possible 2,000,000 Owner Occupiers (4 times the amount of BTL LL's).

Remember the report says "House prices may decline by 30 per cent from peaks"

It would be interesting to see the souce as it seems a little re-hashed to me

Do you have BTLs?

geoffky

At this rate up to 200,000 people are falling into negative equity every month, according to calculations by Citigroup.

Snooze

mower5 wrote: »

Do you have BTLs?

LOL - he's LL for about half of the properties in the whole of Aberdeen.

Rob

MrFonzerelli

So long as you're not (a) looking to downsize or (b) re mortgage most people won't be adversely impacted..

Cannon_Fodder

IveSeenTheLight wrote: »

It would be interesting to see the souce as it seems a little re-hashed to me

FRO link at; http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/025.shtml
opens http://www.fsa.gov.uk/pubs/plan/financial_risk_outlook_2009.pdf

page 40;

"For some borrowers, falling house prices will lead to negative equity.
There are a number of ways to estimate negative equity; we have used the
methodology originally developed by Hometrack to estimate the impact of
various falls in house prices on the number of households which might move
into negative equity. If house prices were to fall by 30% from the end of
2007, it is estimated that over 2 million residential mortgage holders and
500,000 buy-to-let mortgage holders would be in negative equity. "

Arcaine

As someone who is in negative equity (well pretty sure I am) it doesnt bother me that much, I am sure that most of the people in negative equity will still pay the mortgage as long as we have jobs. The only problem really is it depresses the house market further as significant amount of people are no longer able to move when they want/need too.

Heyman_2

carolt wrote: »

Oh no. Gutting about the BTL mortgage holders, isn't it.

Couldn't happen to a nicer bunch.

Yep, it's definitely a good thing to cheer on the financial ruin of 500,000 people in the current climate - can't see that affecting anyone or anything else...nope. :rolleyes: