Almost four million homeowners are either in or at risk of negative equity, new research has revealed.
Millions of homeowners could soon be in negative equity and many already are, according to a study from financial research firm GfK NOP.
The company established the figure, of 3.8 million, after surveying 60,000 householders in the UK. However, this figure could rise to up to five million by the end of 2009 if house prices fall by another ten to 20 percent.
Younger people, including couples and families, were found to be most at risk, because they have mortgages with high loan-to-value ratios, taken out when the market was at its strongest.
It is the latest pessimistic news on the country's housing market, following steady price decreases and forecasts of increasing numbers of repossessions.
Andy Thwaites, director of insight at GfK Financial, said: "The shift to negative equity has the potential to be a mammoth welfare disaster for the nation. The reality is that if there are further job cuts, the problem will become significantly worse."
This could become increasingly important as the UK's economy is widely expected to remain in recession for the rest of 2009 at least. Councils and debt advice organisations have recently reported that growing numbers of people have been requesting their services, from housing benefit to debt assistance.
