Negative equity to hit 2 million by 2010
The housing crash in the UK is set to see literally millions of home owners plunged into negative equity over the next years with the figure expected to peak at 2 million in 2010. Figures released by a number of charities have confirmed that in excess of 60,000 homeowners are moving into negative equity each month a figure which has frightening repercussions for the mortgage default numbers.
The problem with falling house prices and negative equity is that once the slippery slide has begun it gets worse very quickly and can be difficult to turn around. Each homeowner that moves into negative equity has the heartbreaking choice of selling up and taking a loss of staying put and trying to bail themselves out of trouble. If a number of people do decide to take a hit and downgrade their homes then this in itself will have a drag on any possible property price rise as and when the economy picks up.
Negative equity is a homeowner's worst nightmare and the additional funding required can require a total rethink of a monthly budget and how much might be left for luxuries. This is turn then has a drag affect on the speed of any economic revival in the UK and leaves everyone out of pocket.
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