LONDON (ShareCast) - A 17% fall in house prices by the end of next year will put 1.7m households, or 14% of borrowers, into negative equity, a new report has warned.
Credit ratings agency Standard & Poor's said 70,000 of us currently have mortgages worth more than the value of our property, but that could be dwarfed by the potential figure if prices continue to drop.
The figures have forced many to draw comparisons with the property market crash of the early-1990s.
S&P calculates that for every further percentage point slip in house prices, another 0.5% to 1.5% of borrowers could enter negative equity. That's between 60,000 and 180,000 people.
Figures from two of the country's biggest lenders released earlier this month showed house prices were more than 6% lower in June than at the same time in 2007.
Prices are down 7.3% from the peak seen in October of last year, said Nationwide, while Halifax said they were back at levels last seen in August 2006.
Source: http://uk.biz.yahoo.com/080730/214/i41zq.html
