UK: One UK home in 10 'to fall into negative equity'

UK house prices are forecast to fall by 15 per cent over the next two years that would push 10 per cent of Britain’s homeowners into negative equity, signalling a return to the housing crash of the early 1990s.

Analysts at Morgan Stanley, the US investment bank, predict that house prices will fall by 10 per cent this year and 5 per cent next year, forcing 1.2 million borrowers into negative equity, which means a person’s home is worth less than their mortgage.

The bank also paints an even gloomier scenario, suggesting that if house prices fell by 25 per cent over the next two years, more than 2 million — or a quarter of all borrowers — would be affected.

More doom & gloom at
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