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900,000 UK Homeowners In Negative Equity

Due to the plunge of house prices, the industry that represents mortgage lenders said that about 900,000 homeowners are now into negative equity. According to the data revealed by the Council of Mortgage Lenders, homeowners at the north-east part of England has the highest ratio of homeowners in negative equity, with a ratio of 1 is to 10. However, East Anglia and Scotland have a ratio of 1:100.

As compared to the downfall in the early 90s, homeowners in negative equity this time are only in a modest shortfall, which is only less than 10 percent of their property value. However, the council said that the downturn has shown some indicators that it already have reached the bottom.

According to the research of James Tatch, CML’s senior statistician, there are about 903,000 of homeowners that took their mortgage between the early 2005 and the end of last year are into negative equity, and the most affected group are those who took mortgage at the height of property prices in 2007.

CML’s figures include an estimate of around 69,000 of North England homeowners are in negative equity, while 119,000 in Greater London, and 16,000 each in East Anglia and Scotland.

According to Bob Pannell, the difference of the current downturn and on the early 90s is that almost a quarter of those affected in today’s downturn are in the age group of over 40, while in the early 90s, affected people are among different age groups.