Mr Justice Evans-Lombe overruled the Halifax Building Society's refusal to let a couple sell their home at the best price obtainable and deduct their conveyancing fees from the proceeds. The Halifax had told Edward and Doreen Barrett it would not agree to them selling their three-storey Victorian house in Battersea, London, unless it received the entire proceeds - expected to be pounds 250,000.
It said the couple, who owed the building society pounds 324,000, would have to pay their estate agents' and solicitors' fees from another source. Their arrears, meanwhile, were mounting at the rate of pounds 2,675 per month.
The Barretts, who are on income support since Mr Barrett lost his job through ill health in 1989, have no other assets. They took the building society to court, arguing that if they lost their buyer and had to give up possession, the Halifax would get a worse deal under a forced sale.
Mr Justice Evans-Lombe agreed and said the Halifax had shown "no discernible advantage" in refusing to allow the Barretts to complete the sale, which valuers agreed was at the best price obtainable in the present market.
The judge granted the couple an order allowing them to sell the house, with deductions of conveyancing costs.
Last night, Mr Barrett said he saw it as a victory for millions of desperate home-owners across the country. "We are just very pleased that it's all over and has turned out in our favour," Mr Barrett said. "The point of the whole issue was for us to have the right to sell our own home. We were just doing it because we believed it was right."
Since a judgment two years ago, homeowners have been allowed to sell their houses themselves at a market price. But yesterday's judgment takes this one stage further by removing the burden of conveyancing and legal fees from the borrower.
The ruling sets a precedent for county courts where most repossession orders are heard. John Pratt, the couple's solicitor, said the judgment had implications for the estimated 1.5 million victims of negative equity.
"This is a victory for the homeowner over the building society," Mr Pratt said, adding that it would reduce the homeowner's overall debt. In the Barretts' case, the Halifax would have been unlikely to sell for more than pounds 225,000, leaving everybody the worse off.
A spokeswoman for the Halifax Building Society last night denied the High Court verdict was a victory for negative equity victims. "There will still be a shortfall to pay to the building society. It is not a way out."
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