150,000 customers at Lloyds are in negative equity

Published 06th May 2011

Around 150,000 homeowners who have a mortgage with Lloyds Banking Group are in negative equity, the banking giant admitted yesterday.

The astonishing figure highlights the mortgage misery facing families around Britain, many of whom took out super-size loans during the boom.

They are being crippled by the toxic combination of a large mortgage – but a home which is plunging in value.

Negative equity means that the size of your loan is larger than the value of your property, a nightmare which traps people in their homes.

The scale of the problem is massive because Lloyds is Britain’s biggest mortgage lender with three million mortgage customers.

It admitted 13.5 per cent of the total value of its mortgage portfolio is caught in the negative equity trap, and about five per cent of its customers.

House prices peaked in the North East, for example, at £130,000 in October 2007. The same house is currently worth about £101,000 today.

This is a fall of 22 per cent, which leaves many homeowners trapped in homes which are falling in value with a mortgage they are struggling to pay.

Official figures show property prices have fallen in every region of England and Wales over the last year, except London.

And the situation is likely to get far worse following warnings earlier this week that house prices could fall for the next five years.

Source: ' ThisIsMoney '

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