Tue 10 Jun 2008
Thousands of homeowners in negative equity
Over 22,000 homeowners who took out 100% mortgages in the year to 31 March could face negative equity, according to the BBC.Depreciating property values could now mean, that for some, the amount borrowed could be greater than the value of their homes.
A fresh report from the Royal Institute of Chartered Surveyors (RICS) reveals that residential property sales have tumbled to their lowest level for 30 years. The housing slump now poses a ‘very real danger to the wider economy’.
There are signs that the housing market may yet worsen further.
Michael Saunders, head economist at Citigroup, comments: "House prices are down 6% in just the last five months, and the worst of the credit crisis – all that still lies ahead."
Saunders predicts that average residential property prices will fall by over 15% in 2008 and 2009.”
The RICS survey shows that there are currently a small number of homeowners moving home. It states that there were only 17.4 transactions per estate agent made in the three months to the end of May – the lowest level since RICS started collecting the data in 1978.
However, for the first time in ten months, there was a decrease in the proportion of surveyors reporting house price falls.
Posted by Marc Da-Silva
in Citigroup, Michael Saunders, News, Royal Institution of Chartered Surveyors on Tue 10 Jun 2008
Have your say and comment on this article