Five million homeowners could face negative equity by the end of the year, according to figures released today by researchers GfK NOP.
A further house price drop of between 10 and 20 per cent would result in 1.2 million homeowners owing more on their mortgage than their home is worth, in addition to the 3.8 million currently in negative equity.
Younger couples, those with children, and homeowners aged between 25 and 34 are likely to be hardest hit by any such occurrence, as they are likely to have bought near the top of the market and with high loan-to-value ratio mortgages.
The group states that anyone who has taken out a mortgage since 2005 is likely to be in negative equity.
The survey also found that nine out of 10 prospective first-time buyers currently registered with estate agents have a deposit of no more than 10 per cent.
