On a scorchingly hot day last week, an office worker was sucking on a cigarette in the shade of a derelict shoe shop in Northampton town centre.

Michael Gilbert, a suited-andbooted 22-year-old who works in recruitment, nodded towards a notice left in the window by the administrators. “They still owe me a pair of shoes,” he said. Inside, the CCTV screens flicker with images of abandoned racks in an otherwise gutted store.

Northampton was cruelly teed-up for a painful credit crunch. It is the negative equity capital of Britain, according to Fitch, the ratings agency,which revealed last month that 17 per cent of mortgage-holders here owed more than the value of their homes — and it is, by extension, a microcosm of the problems besetting Britain’s consumer economy. Confidence has been pummeled by the collapse in house prices, while the halt in equity withdrawal by homeowners has hit shopkeepers.

For the most part, the empty stores are nationwide casualties — Woolworths, Principles, MK One — but the housing market may explain why its stores are more likely to have been jettisoned in pre-pack administrations (USC, Officers Club, Priceless Shoes) or ditched by struggling chains (JJB has shut two stores and an Original Shoe Company shop).

It may also explain why there was no rush from opportunists to snap up empty premises at knockdown rents. Vacant shops in Northampton, excluding shopping centres, have trebled in the past six months, when between November and May 51 stores closed, with only 13 opening, according to the Local Data Company.

Shopping centres are not having a great time of it, either. The prime positions flanking the entrance to Peacock Place shopping centre are occupied by defunct Priceless Shoes and MK One stores. Inside, half the 24 stores are empty. A promised expansion of the nearby Grosvenor Centre shows little sign of activity, a common tale across the country as property developers retrenched during the downturn.

Not everyone is suffering: just before lunchtime on Monday, Primark had a queue of 29 customers.

“In Northampton, I only shop in Greggs,” Mr Gilbert said, corroborating the theory that the baker, which wants to add another 600 stores in Britain, is having a good recession.

And there is optimism even in the most unlikely of places. By every account, A Watts & Sons should be struggling: it is a family company selling furniture on a high street. “We prepared ourselves for a very bad year and it didn’t happen. We had a great January and it’s carried on,” Richard Jakes, the sales manager, said.

“The Watts name in Northampton is a factor — everyone knows Watts. Customers are more inclined to give us their deposit because we have always been here, rather than a multiple. Most of my colleagues have been here all their lives.” The other factor in Watts’ favour, he added quietly, was the number of competitors that had gone out of business.

The empty shops left behind may provide breathing space for rivals, but they provide a headache for the council and landlords. Keith Barwell, the boss of Northampton Saints rugby club and chairman of the West Northamptonshire Development Corporation, optimistically told the Northampton Chronicle & Echo that “there’s absolutely nothing wrong with the town now that a good John Lewis in Abington Street [the main shopping street] wouldn’t solve”.

The Jesus Centre, housed in a listed Art Deco former cinema on the end of Abington street, bears testament to the opportunities that have presented themselves to unconventional tenants.But there is rancour between retailers and the council as shops and shoppers dwindle in the town centre.

Carl Fitzhugh, a market trader, blamed the council for the difficulties of stallholders. “We just feel let down by local government. We feel like we’ve been done over,” he said. “I lost my business a month ago. Greeting cards. Couldn’t afford to keep it going.” Does the council understand the plight of the traders? “Noooo. Get more than a week behind [on rent] and you’re gone.”

For its part, the council is trying to attract residents to the town centre by devoting space on the market square to special events, such as concerts and screenings of big sports fixtures.

Sport is close to the town’s heart. If The Cobblers may have achieved little of note themselves over the years, they did play host to one of George Best’s finest hours, a six-goal salvo in 1970 that is a YouTube staple. It boasts one of England’s best-known rugby clubs, too, but the “F1 corridor” along the M1 is more economically significant (see case study).

High-performance engineering has suffered in the downturn. Brawn GP, the Formula One championshipleading team, which is based near Northampton, made a third of its workforce redundant this year, while Fairline Boats, also Northamptonshire-based, laid off 275 workers in December. Although highly skilled high-performance engineering employs about 10,000 people in the area, the downturn has pushed unemployment in Northampton above the national average of 7.2 per cent.

Paul Griffiths, chief executive of Northamptonshire Chamber of Commerce, said: “Unemployment has gone up, but from a low base. We have used our location to help us — we’re ideally situated for logistics.” Coca-Cola and Panasonic each have distribution centres in the area, while Carlsberg’s main brewery is in Northampton. Blacks Leisure, the owner of Millets, and Travis Perkins, the builders’ merchant that owns Wickes, the DIY chain, are also based in Northampton.

Mr Griffiths said that rejuvenation of the town centre by the borough council was in the pipeline. The council sits in the neo-Gothic Guildhall, a building adorned with depictions from Northampton’s rich trading history and built during the town’s 19th-century pomp. A few miles across town stands the Express Lift Tower, a monument to Northampton’s more recent industrial past. The former testing tower for Express Lifts fell into disuse when the factory shut in 1997, but, far from regarding it as a 127-metre folly, locals have grown fond of the “Northampton lighthouse” and have opposed attempts to demolish it.

Many in the town are pinning their hopes of new homes bringing new spending power to the area. Indeed, about 31,000 new homes have been earmarked for Northampton by the Government before 2021 in part of the biggest housing development outside the Thames Gateway — but with thousands of householders in negative equity, the immediate future is dark.

Angela Bowater, a Northampton resident, fell into arrears with her mortgage after the break-up of her marriage. “I’m sinking,” she said. “I can afford to rent a new house and to feed myself and that’s all.” Her previous house is on the market for £12,000 less than the value of the outstanding mortgage. The local Citizens’ Advice Bureau said that pleas for advice on mortgage arrears had shot up.

Back in Northampton town centre, yards from the empty shops, All Saints Church bears an unusual inscription — a dedication to King Charles II, who returned “chimney tax” to the town to help to rebuild it after the Great Fire of 1675 (a magnanimous gesture, given that the town helped to send his father to the chopping block by siding with the Roundheads in the Civil War).

“This statue was erected in memory of King Charles II, who gave a thousand tun of timber towards the rebuilding of this church and to this town seven years of chimney money collected in it,” the inscription reads.

With Northampton holding out for new homes and investment, nervous shopkeepers believe that rebuilding the town after the Great Crash of 2008 will require another helping hand.

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