Research by the Council of Mortgage Lenders reveals that two million mortgage holders in the UK are either in negative equity or have too little equity to move house.
Millions of Britons are unable to move because of a lack of equity in their homes, according to a new study from the Council of Mortgage Lenders (CML).
Research by CML senior statistician James Tatch revealed that 900,000 homeowners are in negative equity, although roughly two-thirds of these are only in the red by ten percent or less.
However, Mr Tatch estimates that there are also 600,000 mortgage holders who do not have enough equity for a five percent deposit for an average-priced house in their region, while there are a further 500,000 who could not afford a ten percent deposit. These three groups add up to the figure of two million.
Despite this, the CML believes that the findings should be kept in perspective, as British homeowners are estimated to have roughly £2.1 trillion of un-mortgaged housing equity.
"Negative equity will contribute to subdued property turnover, but otherwise should have few adverse effects for the majority of households affected," said CML head of research Bob Pannell. "Where people need to move house for job or other priority reasons, lenders can often be flexible to existing borrowers with low or negative equity, as long as their financial position is sound and they have a good payment track record."
