Britain will escape a repeat of the negative equity crisis of the 1990s unless there is an unprecedented fall in house prices, according to analysis that suggests talk of a disastrous housing slump is overplayed. Financial Times (Saturday)
Research shows house prices would have to slump by 25% – more than double the falls seen in the early 1990s housing crash – before Britain faced another negative equity crisis.
However, about 350,000 homeowners – roughly one in 75 households – will face negative equity if prices fall by the 10% widely predicted by economists and the property industry.
That is a particularly worrying prospect for those who bought just as prices were starting to peak in regions such as the North and the Midlands, where house values have fallen fastest.