Past Articles for the Debt Management Category

Would-be first-time buyers in the UK that are currently priced out of the property market have been urged to wait before taking on a home loan.

Many first-time buyers struggle to deal with their mortgage-related debt management burden and by taking the time to accumulate a sizeable deposit some of these problems can be avoided.

Paul Holmes, operations director of Firstrung, is convinced that by being patient and using their funds wisely, would-be first-time buyers can side-step some of the difficulties homeowners are feeling at present.

“Save up your deposit and be very careful that you don’t waste that deposit on peripherals,” Mr Holmes advises anyone currently priced out of the housing market.

“Just simply put it away and be confident that as prices are falling there will be a time when you can put that deposit to incredibly good use.”

David Kuo, head of personal finance at Fool.co.uk, said earlier this week that banks and other mortgage lenders are treating their customers unfairly and leaving them with a serious debt management headache.

By Frank Charlton

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Indebted consumers around the country have been urged to be realistic about the state of their finances.

The Cheshire Building Society has suggested that people struggling to become debt free should plan a budget that will see them deal with the most burdensome debts as quickly as possible.

Taking a positive and realistic attitude towards dealing with debt and financial management in general will give consumers a good chance of getting control of their money, the society maintains.

“If you have any outstanding debts, don’t sweep them under the carpet, work out how much you owe and create a budget to get this paid off,” a statement from the Cheshire read.

“Prioritise your outgoings and make sure all the key bills, such as mortgage or rent payments and council tax are being paid regularly and on time.”

Moneysupermarket.com recently warned that July could be a tough month for indebted Britons and particularly those whose fixed-rate mortgages are coming to an end.

By Giles Stevenson

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Banking groups across the UK expect to see the credit squeeze continue for the next three months at least, according to a recent survey.

A poll of money lenders by the Bank of England has established that financial service firms are reluctant to offer borrowing deals to consumers and each other in the current economic climate.

Millions of people are struggling to become debt free but the bank’s survey suggests that lenders are looking to increase their interest rates and offer fewer deals.

In addition, the recent research found that more and more homeowners are defaulting on their mortgage repayment demands.

“Along with news that service sector activity contracted in June, tighter credit conditions heap pressure on the Bank of England to hold off from raising interest rates despite current elevated inflation levels and risks,” said Howard Archer from the analyst firm Global Insight.

The Bank of England opted to reduce the base rate of interest on two occasions earlier this year, which came as welcome news for borrowers with debt management problems.

By Giles Stevenson

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Fears over inflation have reached their highest level the Citigroup and Yougov survey began three years ago.

Over the course of the next 12 months, British consumers are expecting to see their spending power dip considerably as inflation reaches 4.6 per cent, according to the latest data.

This is a notable rise from February when expectations were that inflation would generally be kept just above three per cent.

Many people are already struggling to become debt free and to cope with the rises in their cost of living but matters could be set to get worse before they improve.

A spokesperson for Ipsos Mori said: “While public concern about the issue has not reached the levels recorded during the recession of the early 1990s, the current trend appears to be of rapidly growing apprehension.”

According to a recent report from the GfK NOP research firm, consumer confidence in the UK is “almost in freefall”.

By Simon Dean

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A new report has highlighted the costs associated with attaining a “minimum living standard” in the UK.

The views of people in a range of different circumstances were canvassed and the conclusion drawn was that a single person needs to spend £158 each week to meet their costs and live reasonably.

A couple with two children need to spend roughly £370 each week, excluding their housing costs, while an old-age couple can keep themselves happy with £200 per week, according to Joseph Rowntree Foundation’s assessment.

Millions of people do not have enough money to live in what the foundation estimates to be a minimally decent life and many households face a more difficult financial struggle because of their debt management problems.

Earlier this week, the Treasury announced its plan to bolster the efforts of credit unions to offer relatively inexpensive loan deals to individuals in their local communities.

By Simon Dean

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The typical British homeowner will avoid negative equity and the debt management problems associated with it, according to a report from GE Money Home Lending.

Most property owners have benefited considerably from the sharp rises in house values and are likely to have an “equity cushion” that will effectively protect their assets in the current climate.

Even for those who took on a mortgage loan without paying a deposit in recent years should have seen enough of a rise in property prices to keep them safe from negative equity.

“Over the past decade homeownership has delivered fantastic returns for many borrowers and we would need to see unprecedented falls in property prices for the average homeowner to be severely impacted,” said Gerry Bell, head of mortgage marketing forGE Money Home Lending.

According to the latest figures from Credit Action, including mortgage arrears, the typical British household has a debt management burden worth almost £58,000.

By Dan Mather

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Millions of British consumers are using personal loan and credit card debt in order to cover their short-term housing costs, according to a new report.

Figures compiled by Moneysupermarket.com show that almost seven per cent of adults in the UK have been “forced” to use unsecured credit to meet their mortgage demands or pay their rent.

The figures do not bode well and reflect the fact that many families are looking for short-term solutions to what are likely to be long-term debt management difficulties.

“Having a roof over your head has to be your top priority but to be funding that with a loan you might default on or with a credit card that will eventually charge you interest of over 15 per cent isn’t the solution in the long term,” said Tim Moss, head of loans and debt at Moneysupermarket.com.

Howard Archer from the analyst firm Global Insight said last week that “distressed” borrowing is likely to become more common across the country as the year goes on.

By Dan Mather

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An average British consumer has an unsecured debt management burden worth close to £4,900, according to the latest figures compiled by Credit Action.

Borrowings secured through retail or motor finance deals, bank account overdrafts, credit cards or unsecured personal loans are now worth thousands of pounds for millions of people.

In fact, the charity reports that one person around the country is declared bankrupt or insolvent every four minutes and when mortgage arrears are included the typical debt level is almost £58,000 per household.

House prices are falling by around £65 each day that passes, while 11.8 million mortgage holders around the country have outstanding arrears worth close to £102,500.

A statement from Credit Action said: “Britain’s interest repayments have soared to £94 billion in the last 12 months.

“The average interest paid by each household on their total debt is approximately £3,774 each year which has increased £300 in the last 12 months.”

Moneysupermarket.com claimed recently that July could be particularly painful for thousands of British borrowers whose fixed-rate mortgage deals are about to end.

By Dan Mather

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The downward pressures on house prices in the UK remain strong as affordability constraints continue to concerns households around the country, it has been claimed.

Howard Archer from analysts firm Global Insight is convinced that potential house buyers are finding increasingly tough to secure a deal and existing mortgage borrowers are struggling to become debt free.

Mr Archer’s comments came in response to the latest figures from Nationwide that showed year-on-year house prices are currently falling at 6.3 per cent but that the dip was not as sharp in June as had been the case in May.

“This is hardly the most reassuring of news and does little to dilute concerns that we are headed for a sharp correction in house prices,” said Mr Archer.

Last month, Mr Archer insisted that the housing sector is “being throttled” as more and more families find it tough to cope with their debt management issues.

By Frank Charlton

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July could be a painful month for thousands of homeowners around the country as their fixed-rate mortgage deal comes to an end, it has been claimed.

According to Moneysupermarket.com, mortgage deals worth close to £30 billion will expire over the course of the month and the resulting debt management problems will put a serious strain on household finances.

A slight majority of people whose fixed-rate mortgage deal is coming to an end have been looking into their borrowing options but almost one in five will struggle to find an arrangement they can afford.

“Banks are cherry picking customers, leaving many people unable to find affordable deals to service mortgages taken out in better times, when they were plentiful and easy to get hold of,” said Louise Cuming, head of mortgages at Moneysupermarket.com.

A report from LV= last week suggested that an increasing number of British homeowners are aiming to avoid debt management problems by renovating their property rather than relocating.

By Dan Mather

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