Posted by Jake on Saturday, December 21, 2013 with 4 comments | Labels: Article, Bank of England, Graphs, housing
A graph on page 63 of the Bank of England's end of year report might raise an eyebrow, if not your blood pressure.
Loan to Value (LTV) tells what percentage of the value of your home you owe on your mortgage. For instance, if you have a £150,000 mortgage and your home is worth £200,000 your Loan To Value ratio is 75%.
LTV in 2013 is actually higher than just before the Credit Crash, blamed by many on people borrowing too much on mortgages. In 2007, just before the crash, around 10% of borrowers owed more than 75% of the value of their homes. In 2013 this had risen by a half to 15% of mortgage borrowers. The percentage of borrowers in negative equity in 2013 (they owe more than the value of their homes) quadrupled to 4% of mortgage borrowers.
|Bank of England Quarterly Bulletin, 2013 Q4|