Most of us have heard of negative equity, where your house is worth less than the amount owed on your mortgage. For those that don't want or need to move house this situation may be ok if and when, in the long term, house values increase and the negative equity problem disappears.

However for those who are in negative equity and do want or need to move, the situation is somewhat different.

Whilst the scale of negative equity is far lower than it was 15 years ago when 1.5 million were reckoned to be in this position compared to an estimated 900,000 today, its effect, coupled with changes in the way building societies are offering their products, is having a marked effect on house sales.

Although interest rates have dropped there are fewer lenders in the market offering fewer products. Only a few are prepared to accept a 10% deposit with the majority of deals asking for at least 25%. With an estimated 2 million existing home-owners not able to raise at minimum a 10% deposit from the sale of their home it is not surprising that house moves have stagnated.

This of course has a knock on effect at the lower end of the market. With people unable to move, first time buyers, who may already be having trouble raising a deposit, simply do not enter into the frame.

Ironically whilst Building society interest rates have rarely been so low, falling house prices, negative equity and high deposits mean that many home owners are trapped and having to sit tight for the time being.