The current downturn has reintroduced the concept of a home that may be worth less than the mortgage on which it is secured.

Ten per cent of all borrowers are in negative equity, according to Fitch, which based its analysis on a detailed study of 2.7m loans to top-quality borrowers totalling £263bn. Measured by outstanding loan balance, the picture is worse: 15 per cent of borrowings are against homes worth less than the mortgage. The mortgages account for roughly one in four outstanding UK mortgages and do not include any sub-prime borrowers.