• From This is Money:

    Four out of ten households have taken out the mortgages, according to figures from the Financial Services Authority.
    Many expected that the increase in property prices would help them to pay off their loans.
    But with houses having lost almost a quarter of their value in the last two years, an estimated 4.2m homeowners have to confront the prospect that they may not be able to move for many years.
    Among the hardest hit will be those needing to move to take up a new job, or trade up to a larger house because their family has outgrown the current one.
    Banks and building societies will be unwilling to give them a new loan because they have had any deposit eaten away by falling prices and have never attempted to repay any of the capital on their previous loan.
    To compound the problems caused by falling property prices, the credit crunch has left thousands of white-collar workers unemployed and millions facing a pay freeze, so they have little chance of increasing their mortgage p…

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    Posted by Jon @ 2:15 pm

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