A new housing forecast predicts property prices in Middle Britain are set to drop by £40,000 by Christmas, with some facing negative equity as a result and 9 percent struggling to meet mortgage repayments.

According to the AXA Financial Taskforce and their housing forecast, property prices in Middle Britain are set to plummet over the next 6 months, with the value of properties decreasing by £40,000 by Christmas.

The study claims Middle Britain will witness the biggest decrease in property value- up to 18.3 percent compared to a much lower 12.8 percent elsewhere in the country.

Worryingly some in Middle Britain will face negative equity. For example those who bought their homes in March may only have £15,000 worth of equity in their homes by September- a 9 percent value of the average property value. It is these people, according to the forecast, who are most vulnerable to negative equity.

“Negative equity is something we all remember from the early 1990s and there's nothing to suggest that Middle Britain will be caught up in a crisis of that magnitude,” says Steve Folkard of the AXA Financial Task Force.

“However if you bought a home earlier this year you should bear in mind that the equity you have in that property could go down before it goes up.”

What’s more the rising cost of living and the difficulties in borrowing are set to make it even harder for Middle Britain to meet their mortgage repayments.

“We expect a very tough 18 months for Middle Britain's housing market,” adds Folkyard.

“Middle Britain may have managed to weather the storm before now, but that resilience is being seriously tested by the ongoing effects of the credit crunch.”

Folkyard claims Middle Britain will not be able to escape the economic downturn. During these times Middle Britain should focus on managing their money effectively to reduce any discomfort caused by the coming economic downturn.

“People who are struggling to make their mortgage repayments should avoid burying their head in the sand and should seek to find a solution.”

“Speak to your lender if you have a problem meeting repayments before the problem gets out of control,” concludes Folkyard