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Mortgage debt often greater than house value

01/07/2009

According to the latest findings from global rating agency Fitch, almost 1 in 6 `prime` mortgages in the UK are in negative equity - where the homeowner`s mortgage debt is greater than the value of their home - The Times reports.

The report suggests that this figure could rise to around 1 in 3 over the next year if house prices continue to fall in line with the agency`s expectations.

A Director at Fitch, Ketan Thaker, commented that `although prime borrowers were unlikely to default on mortgage payments purely because they were in negative equity, it reduced the options available to those who were struggling with debt.`

A debt specialist for Debt Advisers Direct said: "Negative equity can be a real problem for some people - if they are looking to sell their property or remortgage, for example.

"However, negative equity needn`t be an immediate concern for those who don`t plan to move or remortgage, as long as they are able to keep on making their mortgage payments."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

US: new law provides debt-free date 02/02/2010 - Thanks to a new law, credit card providers in the More debt taken on than repaid in December 01/02/2010 - According to figures from the Bank of England (BoE), in Savings rise as consumers pay down debt 29/01/2010 - According to a survey of 13,000 savers by ING Direct, Household debt `could trigger another downturn` 28/01/2010 - The high level of debt carried by the British public