Falling home prices may leave many with negative equity
London (ask4loan) November 2, 2007: The prices in the UK housing market are on the fall. Six out of the nine regions in England registered a fall in the home prices last month.
The overall fall for England and Wales was 0.4 per cent which implies a total loss of £1,030 in a single month for an average homeowner. Similarly, an average London property lost £4,208.
Nearly 33,000 first time buyers borrowed the full value of their property between January 2006 and August 2007. It leaves them vulnerable to having a negative equity if the value of their home drops, even by a small amount. Any reduction in the home equity may also affect secured loan borrowers.
The property website Hometrack said that house prices fell 0.1 per cent in October. This may not sound good to the homeowners as their home equity dips and it becomes difficult to get secured loans.