Almost 200,000 households will be in negative equity by the end of next year, representing a third of all mortgages, according to new figures.
The estimates from the Economic and Social Research Institute (ESRI) will increase pressure on the government and the banks to introduce schemes to help those struggling to meet mortgage repayments due to unemployment or falling incomes.
The ESRI estimates that 116,000 households are already in negative equity, where the value of their outstanding mortgage is greater than the value of their property. These are mainly people who bought houses since 2003 with high loans compared with the value of the property.
ESRI economist David Duffy predicted that the total would rise to 196,000 by the end of next year, as house prices continued to fall. Duffy based his calculations on main mortgages and said that top-up mortgages and remortgages may mean the figure would be even higher.
More than half the borrowers in negative equity by the end of next year - more than 100,000 - will have loans which are more than 10 per cent higher than the value of their home, Duffy calculated. The majority of these will be first-time buyers.
Sunday Business Post
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1 comment:
This is a huge different. I mean if loan value would be 10 percent higher then the value of home then it is too much to ignore. Seriously, government and banks have to introduce some policies to get owners out of this crisis.
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