More than 23,000 homeowners may be stuck with houses worth less than their mortgage debt after taking advantage of 100 per cent home loans. As house prices continue to plummet thousands more Britons are at risk of negative equity. 

Borrowers who have not made significant overpayments on their 100 per cent home loan are therefore likely to be in negative equity and could make a loss on their houses if they choose to move. 

Since last March, house prices have fallen by 5 per cent according to data from Halifax, the
UK’s biggest lender. A 20 per cent decline would plunge 2 million homeowners, or one in six mortgage borrowers, into negative equity. 

Research suggests that many more homeowners may be facing the threat of negative equity, with 370,000 at risk if prices fall by a total of 5 per cent this year and next. 

Most 100 per cent mortgage deals have been withdrawn from the market in recent months as banks became more circumspect about their lending in the wake of the credit crunch.

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