A Financial Services Authority report has examined the likely state of homeownership should prices fall 30% from their peak, and revealed that such a scenario will leave two million in negative equity. Unless you're forced to move house, does it matter? The report suggests that households in negative equity are likely to reduce consumption, and thus further harm the economy. Of course, this is an endless chicken/egg debate, but the Rat and Mouse believes it's far more likely that the state of the economy, and particularly employment, has more of an affect on house prices (and thus bricks-and-mortar equity) than vice versa. Homeowners who stay in work can pretty much weather most problems... especially with interest rates so historically low.

Another report, by Which?, suggests that 35% of mortgagees are worried about losing their property. Interestingly... that's compared to 60% who are concerned about a job loss.

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