1.7m homeowners facing negative equity
Some one in seven homeowners are facing negative equity, according to research from credit agency Standard and Poors.
More worryingly, it is predicted that this figure could rise to as many as 3.7 million households, persuading more and more people to rent flats in London.
The survey also revealed that consumer confidence has fallen to new lows as a result of the credit crunch and rising energy bills.
Economists claim that inflation will top five per cent this autumn, which is higher than the Bank of England has said is possible.
Negative equity occurs when unreasonable mortgages are offered by banks and building societies, which is why more people are turning to the rental market.
Currently, around 70,000 homeowners are in negative equity, with the fall in house prices hitting homeowners hard.
Some forecasters are predicting that house prices will drop by 35 per cent, with 30 per cent of homeowners potentially owing more than their property is worth.
Published 1st August, 2008
© 2008 Estates IT Limited
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Some one in seven homeowners are facing negative equity, according to research from credit agency Standard and Poors.