05 August, 2008

According to the predictions of Standard & Poor's (S&P) that over the coming 12 months one in seven UK homeowners will face negative equity.

Halifax and Nationwide figures showed that every year there is 9% decline in UK house prices and credit rating agency predicts a further glide of 17% in a coming year.

Research conducted by CACI shows that around 70,000 homeowners are already facing negative equity. The company calculated that 1, 45,000 mortgage holders had inserted the state by the beginning of July.

According to Standard & Poor's, for every further percentage position decrease in house prices, a further 0.5% to 1.5% of borrowers that is 60,000 to 180,000 people could possibly go into negative equity.

The agency also presumes 1.7 million homeowners to enter brutal financial difficulty in the coming year.

Those homeowners with a relatively tiny amount of equity in their homes and suffering from poor credit status are at highest risk, because remortgagers in either or both of these criteria can face jagged rises in mortgage prices.

The credit crisis or people with bad credit status have left the lenders fussy about the selection of borrowers. Lenders are now interested in offering most competitive deals for those with 2.5% or more of equity in their homes.

Meanwhile, the rest of the lenders have either withdrawn from the market altogether or severely compact their offerings.

News Source: First Choice Loans
Specialist providing unsecured loans