Face the reality - house prices are falling because Government, banks and ordinary individuals were grossly incompetent in allowing cheap debt to drive house prices to stupid levels. I don't care how many people end up in negative equity, its worth it for fairly priced houses.

Jack, Belfast, N.Ireland

Here we go again...it's the unnecessary aggressive cuts post 9/11 that led to the current crisis, Lessons are just never learnt,,,

cww, Ipswich,

Remember folks, this happened before during the late 80s / early 90s. Then, as now, it was mainly self-inflicted by people who cashed in on the nominal increase in value of their home to splurge it on holidays etc.

Paul, Coventry,

I wonder if people who are reposesed could sue the banks for causing the problen in the first place.

john, worthing,

Citigroup are right. It is clear from my own experience that inept agents are still overvaluing properties, causing many property owners/vendors to live in a 2007 pre-Bust dreamworld of unrealistically high prices.

David, London, UK

Deep interest rate cut by the BoE is the way forward because it means it will immediately benefit about 30% of the mortgage holders (on tracker rates). This is a significant proportion and would be a good boost to the household finances. Those on SVR would also benefit to a lesser extent I'm sure.

mac, Manchester, uk

Cutting interest rates does not help those who rely on the interest they receive to pay their way.If rates are slashed,future generations won't be so keen to become savers nor take out pensions.It is vital we encourage people to live within their means and not way beyond it,and low rates dont help.

Mike, Dunstable, England

The biggest problem is that a large element of Brown's debt-bubble propelled "no return to boom and bust" mirage of an "economy" depended on the continuation of unsustainable house price inflation.

What a joke,

Although now 3 million people won't be laughing.

Jon Leigh, Southern, France

The complete mess has been brought about by living on debt, greater debt than one can afford. This is so obvious, both at national level and at personal level.
The sooner we all, including our government, learn to live within our means the soone the problems will fade away.

Chris Goodman, Fareham, England

I agree about the interest rate. At the moment the comodity "money" is scares, and economic laws say that anything scares is expensive. Lowering interest is making money artificially cheap. What is needed is a huge cut in income tax!! That will boost consumer confidence!

Dirk, Newtownards, Northern Ireland,

Banks want deposits that most FTB don't have.
FTB need to save up, the longer this takes, the further prices will fall back and more will fall into -ve equilty.
The further prices fall, sensible FTB that now have a deposit will stay out of the market waiting for the 'bottom'.
Its a long way down!

TT, Manchester, Ebgland

Even though BoE cuts rates most lenders are failing to pass on the cuts to consumers.

Bhavesh Patel, London, UK

we are DOOMED all DOOMED, I tell you!

Negative equity? So what. Surely it does not matter as long as it is your home and you can afford the mortgage, as it will still be your home.
There will always be people who lose out, through bad judgement or bad luck.

spencer, london, uk

Why does a home owner really care about negative equity? When you consider how much interest is paid to bank over 20- 25 years as part of our mortgage payments then everyone's house is worth significantly less than they paid for it. If you don't believe me check out an amortization table.

Charles Rawnsley, Tawern, Deutschland

Cutting base rates by 1% won't do much. Encouraging building societies etc.not to reposess would do much more. House prices will go up again soon, we are an overpopulated island, so to force people to sell up during a brief downturn makes no sense for either the bank or the home owner.

andrew, swindon, uk

I really can't see the benefit of reduced rates if the bank only pass on the cuts to savers. Better to sit tight and ride this out if you can?

Rex Lester, Surbiton, UK

I cant help but feel that the City estimates and such bleak estimations on the UK econonmy are a stunt to increase us all to worry and therefore place greater pressure on the govt to step up the activity to make changes.

But negative publicity = a very worried, and fretful public

Alex, Chichester, West Sussex

Hi everyone - welcome to the brave new world.
House prices are going down - so banks and building societies want substantial deposits from buyers. Guess what? First time buyers just do not have £25 - £30K lying in their bank accounts. So demand shrinks, prices keep falling and we are all doomed!

David Nammory, Liverpool,

Yes, what about us savers...just how do you increase your pension worth in the private sector I would like to know?

Niccola Wells, York,

I have no sympathy! It peple couldn't see back in 2003/04 that house prices were over priced, I was amazed! But to buy in 2007 was madness. Did people honestly think a 1 bedroom flat was woth £200,000?

Mark, Bristol, UK

That is a non-dynamic view of the situation. Similar to "If we raises taxes, government revenue will go up." It is true in the short term, but over time, behavior changes, and revenue drops.
Banks have to lend money to make it, and sooner or later, they will start competing for customers.

David, Sacramento, USA

Surely the definition of negative equity is where your house is worth less than what you paid for it, not how much the mortgage balance is. On the road of 16 houses,where i live, 4 or 5 recent purchasers are in negative equity by this definition as they have lost the deposit they used to buy.

John , Stockport,

Yet another bloke with a crystal ball!!

Basil Bell, Bath,

Cutting interest rates is not the solution.
The banks will not pass it on to borrowers but will reduce the interst paid to savers. They just want to make more monies to cover the bad debts they are getting for lending so foolishly in the first place.

Johny, Kings Langley,