New research has predicted that 5 million households will be in negative equity by the end of the year, with already heavily indebted first time buyers likely to be the worst hit.

The survey suggests that almost 4 millions homeowners already owe more on their property than its current market value, and with little prospect of the housing market seeing a recovery, another million will be drawn into the net.

With job losses continuing to increase, this represents a ‘potential mammoth welfare disaster’ according to Andy Thwaites, Financial Director of GfK who conducted the survey.

Even worse, 7.2m homeowners are banking on their home providing a major part of their retirement fund, which is unlikely to be realistic if the market remains depressed.

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This entry was posted on Friday, February 27th, 2009 at 2:53 pm and is filed under Mortgage Debt and Repossession. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.