Thousands of new UK homeowners are facing negative equity
According to a CACI survey for the Daily Telegraph, one in eight of 1.2 million who bought a property, since then, owe more than their house is worth.
If a house loses its value is not necessarily a problem unless the owner has to move, re-mortgage, or can not pay the mortgage.
UK prices fell by 0.9% on average in June, according to recent figures nationally.
The increased risks
The CACI analysis also suggests that the holders of 360,000 mortgages could be negative equity in late 2008 if housing prices drop 20%.
A recent BBC report - based on data from the Council of mortgage lenders - revealed that more than 23,200 people who took 100% of mortgages in the year and March 31 could face negative equity.
In a rising market banks are willing to pay 100% of mortgages as there is little risk of not getting their money back.
But as prices have fallen, the risks have increased and lenders have been turning away borrowers if they do not have a deposit.
Last week Nationwide said house prices fell for the eighth month in a row in June, with prices now 6.3% lower than a year ago.
It said that the average home now costs £172,415 and is £13,629 cheaper than at the top of the market in October last year.
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