Negative Equity

[WordsAndWorlds]

If no deal really does happen. & it's been predicted that to do so could result in as much as a 35% fall in house prices...am I right in thinking that a humongous proportion of the country would be plunged into negative equity? Because of the climate of maxxed out mortgages in the UK, particularly in the South, a 35% fall would have a massive impact on so many people - would everybody lose their homes? Or just be forced to stay put and pray they could meet their mortgage payments because they certainly couldn't move elsewhere? Otherwise how is the UK going to cope with mass homelessness and what would become of all the repossessed homes?

There’s plenty of people in London that went for interest only mortgages, because prices are so insane that’s the only thing they can afford (and some lenders/advisors pushed for it). For those, negative equity would be a disaster. Similarly if you need to renegotiate your terms and we’re hoping to secure a deal based on a similar if not better LTV rate.
Where I live it’s already market recession, nothing sells. Not many vendors are slashing prices (yet) because of the tiny hope of a resolution, but it’ll come

During the previous recession, areas of London kept their values ‘stable’ only thanks to catchment area of state schools. Plenty of wealthy families that suddenly realised they could not afford 25k a child in fees for private school, and decided it was better to switch to good comprehensive. This kept both rent and purchase prices almost the same. In a post Brexit scenario, this might not happen if there’s a real recession, with no immigration contributing to keeping housing stock busy, and people losing jobs. I had a 20% pay cut, which is not the same thing as losing my job altogether...at which point I would have had no chance to negotiate a new mortgage...