Over recent weeks a number of lenders have decided to bring back 125 percent mortgages, but these will only be made available to existing borrowers who have very good credit and need to move home.

The measure has been put into place by the Nationwide and the Coventry Building Society, with the aim of the measure being to help those that are trapped in negative equity and therefore cannot move home.

With property prices having plunged since their peak back in 2007 many homeowners have seen their equity levels plummet, with some finding that their properties are now worth less than the amount that they have outstanding on them by way of a mortgage.

This is known as negative equity, and homeowners that find themselves in the situation are often trapped and cannot move because of the level of debt that they have on the property.

The move by the two building societies has been welcomed by mortgage brokers, and could help many people that would otherwise be unable to move to do so. The Council of Mortgage Lenders estimates that there are around nine hundred thousand people that are trapped in negative equity.

A broker from Trinity Financial Group, Aaron Strutt, said that the move would enable many people to get out of the trappings of negative equity.

He said: “Having more flexible criteria for existing customers in negative equity will make them feel less trapped. If both parties will be in better financial positions through porting the existing deal to another property, it is a no brainer. We should see more lenders helping their customers in this way.”

The Conventry Building Society said: “As a mutual this is what our members expect of us. We are offering a sensible level of support to people we have a relationship with who are facing real difficulty in moving home.”

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