Forecasts for UK Housing Market

Recent evidence of a slowing UK housing market emerged.

Number of Mortgage approvals fell. According to the Bank of England, the number of mortgage approvals by UK banks fell to 102,000 per month. This is the lowest rate for over 2 years. see more at Bloomberg

House repossessions forecast to rise. The council of mortgage lenders forecast that the number of home repossessions would rise by 50% in the UK. This is due to rising interest costs and a fall in house price growth house repossessions at the Guardian

Prospects of Negative Equity - with house prices starting to fall and the number of home repossessions rising, first time buyers were warned about the prospects of negative equity. Negative equity is when the value of a house is less than the mortgage. In particular, first time buyers were warned about 100% mortgages and borrowing very high income multiples. between January 2006 and August 2007, 33,000 first-time buyers will have taken out 100% or more mortgages. the Guardian