ONE in ten homeowners was in negative equity during the first quarter of the year, the Bank of England has said.
The Bank estimates that between 7 per cent and 11 per cent of homeowners with a mortgage owed more to their lender than their property was worth during the first quarter, the equivalent of between 700,000 and 1.1 million households.
In addition,
about 200,000 buy-to-let investors are also estimated to have owed more on their mortgage than their property was worth, some of whom may also be in negative equity on their own home or on more than one investment property.
The research said the overall number of people who were in negative equity during the first quarter was similar to those who suffered from the problem in the mid-1990s, during the last housing market correction.
It said house prices had fallen by 20per cent between the autumn of 2007 and the spring of 2009, the largest nominal fall in property values on record.
But despite the drop, it found the majority of homeowners had large equity cushions, while for others the total value of negative equity was relatively small.
The research suggested between 73 per cent and 78 per cent of households who were in negative equity faced a shortfall of less than £15,000, and between 56 per cent and 65 per cent had one of less than £10,000.
• One in four people expects to have problems meeting housing costs during the coming year, research out today showed.
The Chartered Institute of Housing (CIH) estimated about 12 million people expect to struggle to pay their mortgage, rent or household bills.
The full article contains 292 words and appears in The Scotsman newspaper.
