The Council of Mortgage lenders has published data provided by all the UK’s mortgage lenders which paimts a startling picture of how the recession is hitting families.

The figures, from last February, show that 565,000 homeowners only have 5 per cent equity remaining in their homes. And a further 10 per cent have between 5 and 10 per cent.

This is not the first time in the UK’s history that negative equity has cast a long shadow. Back in the early 80’s the same thing happened and most homeowners survived. Homeownership is a long term commitment and given time house prices will recover.

However, if you are faced with negative equity and want to move house you have problems. Unless you are in a position to pay off the deficit when you sell your house and then raise another deposit for a new home, then moving is simply off the menue. That probably rules out a move for 99.9 per cent of the homeowners affected. So in practice, those in negative equity are stuck. Their only option is to wait and hope that time and rising property prices will weave the magic.

Current figures from the Nationwide Building Society show that house prices have fallen by 17 per cent in the lat 12 months and the Financial Services Authority predict that 2.5 million homes could be in negative equity by mid 2010 if prices ontinue to fall.