While home equity loans are sometimes the only choice for individuals with no other way to pay for home renovations are other emergency expenditures, they can be harsh for those who discover that they have taken out loans for equity that they cannot repay at the same inflation-adjusted money as which they received it.

Mark Bodega, director at HiFX, said: “Bearing in mind that 2007 was a record year for emigration, the fact that even more people are looking to move abroad this year shows that there is now a very real desire to escape some of the problems in the UK economy.

“However the problem many people are being confronted with is a simple one - they cannot sell their UK property and, without this equity from the sale of a house, they don’t think they can fund their dream move and so are putting their move off.”

“However buy-to-let mortgages can sometimes have higher fees so émigrés need to seek independent financial advice to check that remortgaging is the best option for them and the mortgage product best fits their needs.”

“This property market downturn has affected virtually all property sectors and UK regions simultaneously but regions will vary far more when the upturn comes.” explains Yolande Barnes, head of Savills residential research.

“The lack of turnover and new supply which is such a feature of this downturn will be likely to lead to sharp increases in value in high-demand, low supply areas. Competition amongst homeowners will once again lead to rising prices, particularly in those areas with higher levels of housing market equity and stronger household purchasing power such as London, the South East and Scotland”.

Michael Coogan, director general of the CML, said: “The number of people facing difficulty needs to be kept in perspective.

“The good news is that most people are coping well and continuing to pay their mortgages in full, despite the higher costs of food and fuel and the higher mortgage rates now prevailing in the market for those coming off cheaper original deals.”

Simon Chalk, mortgage and equity release planner for Sheffield-based Mortgage Portfolio Services, stated, “Although this is no surprise, we are in a different situation from the 1990s as we have higher employment and a stronger economy.”

“While rates are easing, criteria are not. The best mortgage rates are still available to those able to put down at least a 25 per cent deposit or who have this level of equity in their homes. First-time buyers without financial assistance from their parents will continue to struggle to get on the housing ladder. While there are glimmers of hope in the mortgage market, the housing market remains in the doldrums,” commented Melanie Bien of Savills Private Finance.

“There is more pain to come here: Savills Research predicts a 10 percent fall in prices in 2008, followed by a 15 percent fall next year. Put into perspective, this will take prices back to 2004 levels. Only when potential buyers believe the bottom of the market has been reached will they purchase - unless they have to move before then,” she concluded.

“Staying on SVR is not a bad position to be in for some people because there is no penalty for staying on it and you can switch away any time without paying a fee,’ says Richard Morea of mortgage broker London & Country.

‘The people whom it may make sense for are those confident that rates will go down, those who are looking to move house and so don’t want to be tied into a new deal, and those who have no choice.’

‘The crux of whether to stay on SVR or not is what LTV you are on,’ says Jonathan Cornell of mortgage broker Hamptons International Mortgages. ‘In the last few months we have seen that there really is a premium to pay for having little equity in your home. But people staying on SVR should be wary as I think we will see lenders increasing these rates.’

“Although the high rate of delinquency has a number of causes, it seems clear that unfair or deceptive acts and practices by lenders resulted in the extension of many loans, particularly high-cost loans, that were inappropriate for or misled the borrower,” said Fed Chairman Ben Bernanke.

After two years, subprime borrowers who have made regular payments on their mortgages should have the opportunity to refinance into lower cost loans without penalty,” said Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., in a statement. “These final rules will assure their ability to do so, and will also assure that those with adjustable-rate mortgages will not be caught having to pay penalties to avoid steep resets through refinancing.”

Darren Cook, mortgage expert at Moneyfacts.co.uk, comments: “Twelve months ago, a mortgage borrower could pick and choose from in excess of 15,000 mortgage products and handed an advance of 125% of the actual property value.

“Most mortgage providers now have a reduced appetite to lend, credit scoring has been adjusted to reflect a general image of today’s household expenses and borrows are requiring a deposit, of between 20 and 25 percent, at best”.

“The last resort for a growing number of borrowers is reverting to their lender’s standard variable rate and it is not unreasonable to predict that a majority of borrowers will be left with only this option during the next six months, if markets do not improve.”

David Frum, a fellow with the American Enterprise Institute stated, “At the peak of the housing boom, mortgage debt as a share of household assets had risen to an all-time peak of over 40 percent. The equity Americans held in their own homes had dropped below 50 percent, an unprecedented low.”

He concluded, “Those trends are going into reverse. Hard-pressed homeowners are selling their houses and taking their losses. Lenders are taking their losses too, writing off mortgages on an enormous scale. As a result, the United States will soon be a little poorer than it used to be, but also probably much less indebted.”

Darren Cook, of analysts Moneyfacts, said “With fears of base rate increases, swap at over 6.3% and rising, and lenders continuing to price more for risk, it is likely that mortgage rates will continue to follow suit. Under these uncertain times, many borrowers are looking to fix their mortgage payments and a five-year deal could become a preferred option rather than the popular two years.

“There is little difference between the initial monthly repayments of these two deals and, in my view, we have now seen the end of ‘loss leading’ product pricing within the two-year market.