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This paper is concerned with the emergence in Britain in the early 1990s of a large group of domestic mortgage holders with negative equity (i.e. whose property had fallen below the value of the mortgage advance used to purchase that property). The emergence of negative equity is traced to the conjunction of the long-term trend towards wider home-ownership in Britain and the effects of deregulation of the financial system in the 1980s. Using individual records from a major building society, the temporal, geographical and social distribution of negative equity is assessed. The results suggest that negative equity was far more likely to affect certain social groups living in particular places and that these appear to be the people least well placed to 'help themselves' out of debt. The concluding section attempts to draw out some of the policy conclusions from these findings.

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In this paper the impact of corporate restructuring in the British building societies movement is examined as an example of the changing organisation of the financial services industry, a significant component of the service sector. It is argued that regulatory changes, which have broken down the segmented and compartmentalised nature of the financial sector, have provided the opportunity for large building societies to diversify into new markets, and this in turn has encouraged a round of innovation in the financial services industry. It is also suggested that as the building society movement has become more deeply integrated into the financial sector as a whole, this has promoted a drift in employment towards the south and east of the country and a shift back to larger urban areas in the provinces.

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