The Bank of England has recently confirmed figures relating to the levels of negative equity amongst homeowners in the UK following around twenty months of house price falls.

The figures from the Bank of England have shown that around 1.1 million homeowners have now been plunged into negative equity as a result of the house price falls, and this is where the value of their home is actually lower than the amount that they owe on the property.

The quarterly bulletin from the central bank showed that between 7 and 11 percent of homeowners were now in negative equity, and in many cases these are buyers that purchased their homes over recent years when prices were near to their peak, as well as those that put down little or nothing by way of deposit over recent years.

The figures were on to show that around 200,000 buy to let mortgages had also gone into negative equity, where they were worth less than the amount of the loan that was used to pay for the property.

Because those that have been hardest hit by negative equity are the ones that purchased whilst prices were high and put down little or no deposit, it is mostly younger first time buyers that will have found themselves in this situation, according to industry experts.

Recently the Council of Mortgage Lenders estimated that around 900,000 homeowners were in negative equity but the Bank of England figures show that the actual number if significantly higher than this previous estimate.

Earlier this year the Financial Services Authority predicted that over the course of this year two and a half million households could be plunged into negative equity.

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