The Credit Crunch - Consequences In 2008 And Beyond.

I am puzzled from what I read on the Telegraph’s website
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/19/bcnking219.xml

The article titled: “Bank of England’s Mervyn King warns wages will stagnate and house prices will fall“.

The title in itself signals that the Government and Bank of England can’t do anything to prevent it or they don’t want to do anything, do they? Is it not just a propaganda to prepare our mind for difficult economic times ahead of us? Do house prices have to come down and conversely food, fuels and other necessities have to go up? May be, just may be. But at UK Property Ladder we’ve identified four consequences to watch out for and will tell you what you could do to protect yourself.

1. Negative equity - homeowners
   Negative equity occurs when a mortgage outstanding is larger than the current value of a property on which it is secured. For example, if a property which has down valued to £160,000 but the oustanding mortgage is still £180,000, the negative equity of £20,000. This means that the property is worth less than the loans secured on it, then selling it up will not clear the outstanding debts. Is this case avoid a forced sale at all cost. As long as you don’t need to move you are fine. Eventually things will improve.
2. Negative equity - landlords or second home owners
   You can’t sell without finding extra money. To make things worse you could also have negative cashflow where the rents you’re getting do not cover the mortgage. In this case a lease option or let to sell is your best solution. esIf yat the property is worth less than the loans secured on it, then selling it up will not clear the outstanding debts. Visit our landlord-sellers section.
3. Repossessions - homeowners
   You’re beeing forced to sell by your mortgage lender. You must avoid a repossesion of your home at all cost.  This will  bear negatively on your credit file for several years and seriously damage your ability to borrow money in the future. Selling and renting it back could be an option. Make sure you ask the option to buy your property back when your circumstances improve.
4. Repossessions - landlords - second homeowners
5. Asking price too low but you must sell