At least one in six prime mortgages in the UK are in negative equity, it has been revealed.

According to a study by ratings agency Fitch homes in Sunderland and Northampton are most affected by the crisis.

Reports said Northern Rock has the most loans that were once prime but now in negative equity, the research revealed further.

32 per cent, it was added, were in its controversial Granite book higher in value than the homes they are secured against.

Reports added that the lender specialized in offering borrowers 125 per cent together mortgages which combined a 100 per cent home loan with a personal loan.

The offers were specifically aimed at first-time buyers struggling to get on to the property ladder.

Many lenders, including those bailed out by taxpayers, have books of mortgages where one in five loans are in negative equity.

Northampton, Nottingham, Derby and Peterborough were all found to be with the highest concentration of negative equity.