Friday 17th of April 2009
Around 900,000 homeowners in the UK are currently in negative equity, it has been revealed.
The figures from the Council of Mortgage Lenders (CML) could indicate that the need for IVA help is set to rise, as those who are unable to use equity in their home to repay debt may need to turn to non-borrowing solutions.
According to the body, repayment problems arise when negative equity is combined with a loss of income or changes in household circumstances.
And with Capital Economics predicting that unemployment will reach 3.5 million, a growing number of homeowners could be set to need IVA advice.
The CML noted that 1.5 million households were in negative equity at the height of the recession of the 1990s, although head of research Bob Pannell observed differences in the current situation.
He explained that young, first-time buyers were most affected in the last recession, but the problem is now more evenly spread.
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs could help homeowners threatened by repossession
