Around 23,000 people are facing negative equity, mortgage lenders have indicated.
New figures have suggested that thousands of Britons are at risk of falling into negative equity, the BBC reports.
According to data from the Council of Mortgage Lenders (CML) obtained by the broadcaster, around 23,000 people who took out a so-called "100 per cent mortgage" between March 2007 and March 2008 are facing having the value of their loan exceed the value of their home. This could make it very difficult for the homeowner to sell the property.
Purchasers of 100 per cent loans - which offer the entire cost of the property in the loan without requiring a lump sum initial deposit from the borrower - are particularly vulnerable to downturns in property prices, due to the comparative lack of equity built up in their homes. With the onset of the credit crunch, these mortgage products have entirely disappeared from lenders' product ranges.
The new CML figures come alongside new research from the Royal Institution of Chartered Surveyors (Rics), which show that risk-averse mortgage lenders continue to tighten their credit criteria for borrowers. According to the body, the number of transactions per estate agent has now fallen to the lowest number since the survey began in 1978.
Commenting, Jeremy Leaf at Rics said the figures showed that "demand remains weak" and that "housing transactions continue to evaporate".
