Falling House Prices Could Worsen Mortgage Crunch for Britons
- BOE blog warns of negative equity, higher LTV ratios for many
- Wider mortgage spreads could have ‘material’ economic impact
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Falling house prices could worsen the crunch facing households when they come to refinance their fixed-rate mortgage deals, according to research from the Bank of England.
A 10% slide in house prices would push almost 700,000 mortgage holders into negative equity with a home worth less than the loan used to buy it, according to a report on the BOE’s Underground blog. It would also cause a further 350,000 recent mortgagors to be nudged into higher loan-to-value brackets.