Figures released by the Bank of England suggest that as many as 1.5 million borrowers had less than 10% equity in their home as of March.
The Bank has published its Trends in Lending report today, which pulls together statistics collected by the Bank and data provided by the UK’s major lenders.
Data from 11 banking groups, accounting for around 85% of mortgage lending, indicates that as of March some 14% of borrowers had less than 10% equity in their home.
Given the 11 million UK households who currently have a mortgage, this equates to 1.54m home owners who own less than 10% of their property.
Stripping out the approximate one million households with a buy-to-let mortgage, the figure would drop to 1.4m home owners.
The statistics also show that the proportion of outstanding mortgages on their lender’s SVR has gone from 23% in January 2009 to 34% in March 2010.
Around one in 10 loans in March that were in arrears were granted concessions by lenders such as a temporary reduction in, or deferral of payments.
The report also reveals that although the number of advertised mortgage deals has risen recently, major UK lenders told the Bank that both the availability of credit and the level of demand stayed relatively flat in April.
It says: “Over the past year the number of advertised mortgage products for different LTV ratios and for buy-to-let mortgages has increased, though the number of advertised products offering LTV ratios of 90% or higher has remained low relative to pre-crisis levels.
“Notwithstanding an increase in the number of products at LTV ratios between 75% and 89%, the proportion of loans advanced at LTV ratios above 75% has been little changed since Spring 2009.”
Since the start of the year advertised two-year fixed mortgage rates for 75% LTV products have fallen slightly, and are currently at their lowest level since records began in 1995.
But the Bank notes that advertised two-year fixed mortgage rates for 90% LTV products have remained unchanged over this period.