About 100,000 people who bought homes last year with little or no deposit are likely to find themselves in negative equity as soon as September. The Times
Mortgage brokers said that borrowers who bought last year with deposits of 5 per cent or less could soon owe more than their property is worth, after figures from Nationwide indicated house prices were set to fall by 5.8% by the end of the year.
If the property market continues to fall at those rates, house prices will hit the 5% mark in September, Capital Economics said. An estimated 10% of mortgages sold through the biggest brokers in 2007 were for loans worth more than 95%, according to the Council of Mortgage Lenders.