Responding to the figures, Nick Hopkinson, Director of Property Portfolio Rescue (PPR) said: "Around one third of all UK mortgages are likely to be in negative equity by next year. Anyone worried about their job or ability to continue paying their mortgage in the near future should be acting now, selling their property fast, getting specialist debt or mortgage advice and certainly reigning in their spending wherever possible before it’s too late.
"Unemployment is continuing to surge and re-mortgage criteria are getting harder by the day, as shown by the virtual collapse of re-mortgage lending over the last few months. Also, inflation is still above the Government’s 2% target, which inevitably means loan costs can only increase from today’s historic low.
"Many homeowners are sleep-walking into a nightmare combination of reduced household income, negative equity and higher mortgage costs.
"With house prices expected to fall a further 10% from today, anyone at risk of negative equity could be in serious trouble if they delay in selling or addressing their situation any longer."
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