The number of Spanish homes that are worth less than their mortgages has more than doubled in the last two years to at least 250,000, according to a new study by consultants Oliver Wyman.

According to the study, anyone that bought a property in Spain in 2007 or later with an 80% LTV mortgage is now likely to be in negative equity, as property prices have fallen by more than 20% since their peak.

The number of homeowners in ‘neggy eggy’ two years ago was 100,000 so the increase is alarming. However, unlike in the US where borrowers can simply hand back the keys to a property and walk away, in Spain lenders can pursue borrowers for as long as it takes to get repaid in full, reports Spanish Property Insight (SPI). The Spanish banks can also add on penalty charges for late payment.

SPI also report that foreign (UK) borrowers cannot expect favourable treatment either because Spanish banks are able to go after the UK assets of British borrowers that default on their Spanish mortgages through British courts.

With no end in sight for the Spanish property market woes, idealista.com has just reported that property prices in the country fell by -7.3% in the 12 months to the end of August this year.