Bank of England estimates 11% of UK homeowners in negative equity
While this may be a headline grabbing report from the Bank of England, which has estimated that up to 11% of UK homeowners may potentially be in negative equity, in all honesty it is not unexpected. The report suggests that between 7% and 11% of UK homeowners are in serious trouble with their mortgages, a figure which equates to around 1.1 million homes across the UK.
The major concern is the lack of liquidity in the UK mortgage market and, despite attempts by the government and the regulators, there appears to very little direct assistance to those in trouble. On one hand the UK government is suggesting that banks should take no undue risks while on the other they are imploring them to "run with" potentially bad mortgages. There is no doubt that the number of repossessions in the UK is set to rise significantly over the coming weeks and months and could in many ways hold back the property market.
Liquidity should, in the eyes of many, be much more fluid at this moment in time than it actually is, with UK banks for some reason averse to taking on a significant number of new mortgage customers.
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