'No way to eliminate debt' for negative equity homes
'No way to eliminate debt' for negative equity homes
- Monday, 2 March 2009The threat of negative equity is placing a
national debt management problem on British households, it has been claimed.
Figures from GfK NOP indicate that five million households could enter negative equity by the end of 2009.
The effect that this could have on
national debt management is highlighted by a spokesperson who explains that capital growth in the nation's homes was previously being used by many as a means by which to eliminate debt elsewhere.
Andy Thwaites, director of insight at GfK Financial, says: "The shift to negative equity has the potential to be a mammoth welfare disaster for the nation."
He adds that this is true "particularly when so much of the population has recently relied on the capital appreciation in their home to supplement their lifestyle".
Younger homeowners are said to be most at risk, as they have a higher chance of having taken out a loan for the full value of their property.
In August 2008, GfK NOP warned that property prices typically take a long time to recover following a recession, despite more than 11 million Britons looking to equity to fund their retirement.

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