More than 23,200 people who took out 100% mortgages in the year to 31st March could face negative equity, according to figures obtained by the BBC (http://news.bbc.co.uk/1/hi/business/7445324.stm). Falling house prices mean the amount borrowed could be far greater than the value of their properties. However, this represents only approx. 2.5% of the total mortgages given out during that period and a much smaller percentage of the overall number of mortgages in the UK.

The data from the Council of Mortgage Lenders comes as figures show the housing market is slowing down further with separate housing figures suggesting that the number of transactions per estate agent has hit a 30 year low. These figures from the Royal Institution of Chartered Surveyors come as banks are imposing stricter requirements on borrowers.

Usually if a house loses value it is not necessarily a problem unless the owner decides to move or cannot afford to pay the mortgage. Banks have been prepared to lend 100% mortgages in the past as there has been little risk of them not getting their money back but as prices have been falling, the risks are greater and lenders are turning borrowers away if they do not have deposits with warnings that the situation may worsen further in the future.

Data released by the Royal Institution of Chartered Surveyors shows that only 17.4% of transactions were made per estate agent in the period March to May which is the lowest figure since data was first collected in 1978.

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Article referenced from http://news.bbc.co.uk/1/hi/business/7445324.stm