Around 565,000 homeowners have equity of 5% of less in their property and another half a million have under 10 percent equity in their home. All these homeowners may find it difficult to remortgage as many mortgage products now require 10% equity of more on new mortgage deals.

Many of those who are currently sitting on a house with negative equity are those who were tempted by the 100% plus mortgage deals that were readily available before the current financial troubles. Lured by the thought of rising house prices, these mortgages seemed a good idea at the time even though some meant home owners would be in negative equity at the start of the mortgage, however with prices falling or stagnant, many have found that these 100% plus mortgages were not such a good idea after all.

For those who are unable to remortgage, it means either being faced with a massive loss if they choose to sell their property or they must stay in their property on their current mortgage deal for the foreseeable future.

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