A STAGGERING 200,000 Brits face losing their homes in the looming recession, alarming research suggests.
A toxic double whammy of sky-high mortgage rates and tumbling house prices will leave many Brits in negative equity.
200,000 Brits face losing their homes in the looming recession, alarming research suggests
The Resolution Foundation think-tank warned that one in five homeowners under 34 will be plunged into the red with their homes.
Chancellor Jeremy Hunt is considering championing new ‘stretchy mortgages’ to stave off devastating repossessions.
He is looking at encouraging banks to loosen rules so homeowners can extend their mortgages for longer – and then shorten them back down when the economy recovers.
So, someone on a 25-year mortgage could choose to cut their bills by extending to a 35-year mortgage, but then be allowed to go back to a shorter mortgage when rates come down.
Sophie Hale , an economist at the Resolution Foundation, said: “The combination of rising mortgage costs and falling house prices risks dealing a double-punch blow to young homeowners as they struggle through the cost-of-living crisis.
“If house prices were to fall by 9 per cent as the government’s official forecasters predict, then over 200,000 homeowners could be plunged into negative equity, with young home homeowners most at risk.”
It is up to banks to decide how flexible they are with mortgages.
But the Chancellor has been briefed on the idea by campaigners and is considering encouraging banks to offer them.
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