1.2m homes 'facing negative equity' |
29 2008 |
| A total of 1.2 million households could fall into negative equity if the housing market does not see any significant improvement, the Bank of England has warned. Releasing its Financial Stability Report on Tuesday (October 28th), the Bank claimed that the number of homes having to contend with negative equity could reach one in ten if prices drop just 15 per cent from their peak in 2007. Current estimates suggest that homes have already lost eight to 12 per cent of their value, while many analysts predict a further ten per cent to be lost by the end of 2008. A Reuters report quoted the Bank as warning that the eventual decline in house prices will be difficult to predict. "House price forecasts suggest further falls, although the size of these falls is highly uncertain," the report said. Such a state of affairs may be one reason why many who would otherwise be first-time buyers are now looking to rent property. Demand for rental property has been booming in 2008 as Britain's second-largest lettings agent reveals it has enjoyed a 50 per cent rise in demand.  |
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