More than two million home owners face falling into negative equity this year, the City regulator warned.

The Financial Services Authority said that if property prices fell by 30% from their peak — as appeared likely — two million home owners and 500,000 buy-to-let investors would have mortgages greater than the value of their property.

It could leave one in four home owners with mortgages and half of buy-to-let borrowers unable to sell their properties or remortgage until property prices rose.

Daily Telegraph

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