Standard And Poors Sees Problem Of Negative Equity Increasing
When the leading credit ratings agency, Standard and Poors, suggest that UK house prices still have some way to fall it really is time to sit up and listen. Standard and Poors suggest that the UK market still has a further 17% to fall before it can start to rebuild again, a figure which will see 1 in 7 home owners move into negative equity - a figure of 1.7 million home owners in total!
The news is a bitter blow to not only the housing market but to the banks which will see the assets backing their mortgage loans fall lower than the amount outstanding, increasing the risk of defaults and fire sales in the case of repossession. The Standard and Poors agency has forecast that the current turmoil will continue well into 2009 and see more house builders and mortgage companies suffer as a consequence.
While we recently had some good news on the trend for mortgage rates, with a number of prominent groups moving their rates lower, it seems there is substantially more pain to come for the sector. Trying to figure out the bottom of the market has become an impossible game for even the experts with each and everyone having a different opinion.
Share this..
Related stories
BA increases fuel surcharge
British Airways (BA) has increased its fuel surcharge on long-haul flights.The carrier blamed rising oil prices for the increase, which is due to be implemented from Wednesday May 2nd.Passengers travelling on long-haul flights of less than nine hours will see their £30 surcharge increase by ten per cent, while the surcharge on flights over nine hours will increase to £38.Although admitting that...
Read MoreIs it time to look at recycling to save money?
While the UK government has for some time been trying to force many of the UK population to recycle, reuse and reduce their waste there has been limited success in some areas of the country. However, the ongoing recession has placed significant pressure upon many household budgets and seen more of the UK population look towards recycling and reusing materials as well as reducing their waste. There...
Read MoreUK construction sector mirrors concerns for the UK economy
The unprecedented increase in productivity between April and June, which saw British construction output increase by 8.5%, appears to be cooling with the latest purchasing managers index showing that this relatively high degree of growth has slowed markedly of late. Those involved with the industry believe that a significant reduction in house building since June is the major cause of the problem...
Read MoreOlder generation feeling pinch
New research has suggested that the 'buy now, pay later' culture is catching up with the older generations.According to figures from Callcredit, as many as 16 per cent of over 55s cannot define their debt levels and many are beginning to face serious difficulties with their finances.Commenting on the figures, Mark Ward, consumer debt expert at Callcredit, said: "It is a sobering reminder about the...
Read MoreAlistair Darling begs G20 for extra IMF funding
In what appears to becoming a series of begging letters it has been revealed that Alistair Darling has asked his fellow G20 members to commit to additional funding for the International Monetary Fund (IMF). While this will come as no surprise to those close to the situation the figures in question are around $250 billion in addition to the $250 billion which the IMF currently receives. So where ex...
Read More