About 10% of British households measured to fell into negative equity, BoE says

As the Bank of England stated on Friday, more than 10% of British households may have fallen into negative equity, like mid-1990s level. 

BoE measured between 700,000 and 1.1 million homes were in negative equity in the first quarter of 2009. So, homeowners owe more on their outstanding mortgage than their property is worth. 

House prices dropped sharply following increases in borrowing costs during the credit crunch and then a loss of confidence and spending power during the recession. 

Previously it look liked that the economy and the housing market, particularly, could start recovering, but many banks remain unwilling to lend and policymakers are still unsure about how sustainable recovery can be. The BoE warned there was a great deal of uncertainty around its negative equity estimations.