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Million in negative equity

Nearly a million mortgage borrowers have fallen into negative equity, the Council of Mortgage Lenders has revealed.

Its research estimates that 900,000 homeowners have some degree of negative equity but around two-thirds face only modest shortfalls of less than 10 per cent. This equates to around £6,000 for first-time buyers with negative equity and £8,000 for other homebuyers.

The CML says at the depth of the last housing market recession in 1993, 1.5 million households were estimated to be in negative equity.

Head of research Bob Pannell says: “Most borrowers are likely to adopt a strategy of sitting tight and building up savings or overpaying on the mortgage.”

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