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
Strong UK economy growth figures expected
29/04/2014 The latest UK economic figures are expected to show the highest level of growth in almost four years. The figures also mark the fifth consecutive period of economic growth – something that hasn’t been achieved since the start of the financial crisis in 2007. The encouraging figures are expected to show gross domestic product (GDP) grew by 0.9% over the last three months in com...
Read MoreNorthern Rock announces 650 job cuts
Northern Rock, the taxpayer owned banking operation, has today revealed plans to cut 650 jobs by the end of 2010. It is hoped that there will be no compulsory redundancies required and the 650 job losses will consist mainly of those leaving the group or entering retirement. However, unions believe that the final number of job losses in this particular phase will top 990 a figure which is nearly do...
Read MoreTesco confident on economic recovery
Results from Tesco today showed an 8% increase in sales to £32.9 billion for the first half of 2010 with underlying profits up 14% to £1.8 billion. However, it seems that the economic recovery in the UK, while "slow and steady", is trailing that of international markets with Tesco reporting a marked recovery in its international portfolio. It seems as though fuel costs in the UK are eating in...
Read MoreIrish authorities breathe a sigh of relief
The Irish authorities are today breathing a sigh of relief with news that the €1.5 billion bond auction has gone relatively well. There was enough demand to fulfil the total €1.5 billion auction and indeed in the secondary market there has been a reduction in the yield demanded by investors which effectively reflects the growing confidence that perhaps the Irish economy may not need an...
Read MoreZavvi calls in restructuring team from Ernst and Young
Zavvi, formerly the Virgin Megastore, has today called in a corporate restructuring team from accounting specialist Ernst & Young as the demise of Woolworths and its Entertainment UK division continues to send tremors through the high street. As we covered recently, Zavvi was forced to suspend online sales of DVDs, CDs and games due to the demise of the Entertainment UK division of Woolworths whic...
Read More