Friday, Jun 12, 2009
11% of mortgagers in nequiity @ Q1
Bloomberg: BOE Says One in 10 U.K. Homeowners May Face Negative Equity
The British housing-market slump has mired as many as one in 10 homeowners in negative equity, where their mortgages exceed the value of their properties, the Bank of England said.
An estimate based on banks’ loan book data shows 11 percent of borrowers were affected at the end of the first quarter, the U.K. central bank said in its quarterly bulletin published in London today. That implies 1.1 million households now face negative equity.
Posted by 51ck-6-51x @ 09:17 AM (782 views) Add Comment
12 Comments
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1. theboltonfury said...
the report states that between 7 & 11% are in NE
They say it's impossible to tell exactly what the true figure is as people lie about how much they owe and inflate their house valuation. That sounds about right.
2. Carrera5 said...
Just that few ???
3. hpwatcher said...
It's funny the way that housing has been turned into a ''national equity'' or a national share price, as if the whole value of the country depended upon increases and decreases......... Perhaps it only serves to show the serious weakness of the economy and the lack of any credible wealth either being created or transferred into the UK.
I expect to see some fairly imaginative accounting tricks used over the next few weeks, to obscure what is really happening.
4. mark wadsworth said...
@ Carrera5, exactly, Lloyds/HBOS admitted back in February 2009 that 540,000 of their borrowers were in Nequity and Lloyds/HBOS only covers 28% of the market.
5. brickormortis said...
I should point out that if we take the upper limit, then 11% equates to almost 1 in 9 not 1 in ten. And it does make a difference. For 9 million mortgages, 1 in 9 is 1 million and one in ten is 900,000 a difference of 100,000. I just plucked the p million out of the air by the way.
6. 51ck-6-51x said...
Indeed - this is what the BoE says, always go to the source and think about any bias. Some fiddles are asy to spot (like bickormortis spots, others are harder - what method was used to go from their loan book data to the entire market, for example.)
7. brickormortis said...
Oops, should say "9 million", not "p million". Must be all these green shoots I've been digesting recently.
8. Brickormortis said...
Oops, should say "9 million", not "p million". Must be all these green shoots I've been digesting recently.
9. george monsoon said...
This pales into insignificance, when you add on all the accumulated debt mountain from Credit Cards and loans...
10. timmy t said...
Wonder what the figure is for BTL'ers? Presumably higher because they would typically maximise their MEW to fund new purchases. And in the case of Landlords one homeowner might account for 20 'homes'. So if there were 1 million homeowners under water, 100,000 of which owned 20 properties each, that would be nearly 3m homes in negative equity.
11. mark wadsworth said...
GM, I think you're wrong - eighty or ninety per cent of UK household debt is "secured" on land and buildings, but don't ask me for an exact figure.
12. 51ck-6-51x said...
timmy t - a good point, since many BTLers do have one mortgage for their portfolio.