At present there are in the region of 827,000 homeowners who have a mortgage that is larger than the value of their house. They are in negative equity.

But according to research by HML, one of the largest financial outsourcers in the UK and Ireland, this figure could double to nearly 1.7 million if house prices tumble by a further 10%.

If this happens 23.8% of those in negative equity will be below the age 0f 30 and another 23% will be under 40.

Northern Ireland would suffer the worst with negative equity rates there hitting 30% of mortgage holders. And the North West of England would have well over 213,000 homeowners in negative equity, the largest regional amount in the UK.

As HML points out, this is a cigarette paper thin amount from the record numbers of those in negative equity after the housing crash of the early 1990s when there were 1.8 million households so affected.

This of course is without factoring in any unsecured debt that these householders have.

This has further repercussions when you realise that these people are locked into their houses and will find it extremely difficult to move, which will have an effect on the economy as labour movement becomes harder.

Even renting out their houses so they can move and rent elsewhere to change areas could be difficult unless lenders are very accommodating.

Neil Warman, HML's chief finance officer said: 'This analysis show just how vulnerable UK households are to a continuing fall in house prices. Since their peak before the onset of the credit crunch, house prices have fallen by nearly 18 per cent and, although there's considerable variation in future forecasts, a number of analysts are saying we need to brace ourselves for further falls.'

'HML's data shows that even if house prices dip by just 2.5 per cent, more than 1m UK households will have a mortgage debt that is larger than the value of their home. For many regions, negative equity could hinder the free movement of labour, especially among younger borrowers, which will inevitably contribute towards a delayed economic recovery.'

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