Serves them right, their greed, the banks wiliness to lend 100% mortgages and the "buy to let hype" is what caused the problem and the rapid house price inflation (30% pa in London before the crisis) in the first place.

The trouble is people have short memories, and no doubt the cycle will repeat it's self again in a few years time.

Negative equity is only a problem if you need to sell, otherwise it will eventually come back to what you paid for it.