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3m face 'negative equity nightmare'

Up to three million UK homes face the financial nightmare of negative equity, the Daily Mail reports.

This means that one in four households could face the value of their mortgage loan being higher than their property's value - a money trap which makes moving home or remortgaging potentially financially ruinous.

The gloomy prediction follows comment from the International Monetary Fund, claiming that there is currently a 25 per cent chance of a global recession.

Two banks, the Co-op and First Direct have also withdrawn entire ranges of fixed-rate mortgage products this week - a further sign that the housing market in the UK is shrinking.

Commenting, Lib Dem finance spokesman Vince Cable termed the negative equity warning "highly plausible".

The newspaper claimed to have used "expert City analysis" in coming to its three million negative equity figure.

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