Almost 1m homeowners ‘in negative equity’

Approximately 900,000 people who have home loans are currently in negative equity, according to a new report.

Data unveiled by the Council of Mortgage Lenders compared this to the 1.5 million people who faced the prospect in the depth of the last recession, which occurred in 1993.

However, the body noted that negative equity does not always mean that borrowers will have problems with mortgage repayments.

It explained that arrears are more likely to be caused by a rise in spending commitments or a drop in income.

CML spokesperson Bob Pannell remarked: “Negative equity will contribute to subdued property turnover, but otherwise should have few adverse effects for the majority of households.”

He said that those with a “good payment track record” should be able to reach agreements with lenders if they do have a change in circumstances.

It comes after the CML stated that the value of homeowner loans approved in February was £3.1 billion.

Leave a Reply

Your email address will not be published. Required fields are marked *