Azara Blog: Surprise, some people in the UK face negative equity

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Date published: 2008/06/10

The BBC says:

More than 23,200 people who took out 100% mortgages in the year to 31 March could face negative equity, according to figures obtained by the BBC.

Falling house prices mean the amount borrowed could be greater than the value of their properties.

The BBC, like the rest of the media, love to run hysterical housing stories. It is trivially obvious that when the housing market is past the peak, and when loads of people took out 100% mortgages at or near the peak, then many of them will be in negative equity. The fact that it is currently only 23200 is more to the point, because that seems amazingly low, although of course that number will steadily grow the next year or two (or more). And no doubt the BBC will run similarly hysterical stories over the next few years saying the same thing over and over again, with updated numbers. The media loves nothing better than a bad news story.

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