Negative equity nightmare could return to house market, warn MPs

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Acting leader Vince Cable told a Westminster briefing: "Gordon Brown's reputation is built on economic growth but there are ominous signs that the bubble is now about to burst.

"Brown's economic miracle has been over-dependent on consumer spending generated by mounting household debt, much of it secured against a grossly inflated bubble in the housing market.

"With the credit crunch now biting and the economy slowing we could see millions struggling to pay their debts leading them into mortgage arrears, repossession and negative equity."

Mr Cable, an economist and the party's Treasury spokesman, went on: "The Government's attitude to the economy has been one of hubris and complacency.

Ministers have failed to put in place any preventative actions to stop a crash.

"The Government should be working with banks to prevent large-scale repossessions and keeping families in their homes through properly regulated leaseback or shared ownership for families in arrears.

"House inflation should be incorporated into the Consumer Price Index.

"There needs to be a return to responsible lending by the banks which have recently behaved too much like casinos.

"So far Gordon Brown has avoided taking the blame for the disasters of recent weeks, but if there is a housing crash the Prime Minister will be at fault and will have to take responsibility for causing misery to millions."

The Lib Dems said 80% of UK households' debt was mortgage related.