Thousands Of Britons Face Home Loan Woes
For millions of Britons with home loans to repay, the next few weeks are going to be a very unpleasant experience. If the latest rise in interest payments were their only concern, then possibly the inevitable problems that lie ahead could be limited. However, for millions of Britons with tracker and flexible home loans the latest financial news seems to be going from doom to certain gloom!
On the one hand, the latest base interest rise by the Bank of England will be taking an immediate effect on their monthly home loan mortgage repayments this month. On the other hand, rising oil and energy prices have meant that year-on-year inflation shows the cost of living in the UK spiraling to 2.5% (0.5% more than the Bank of England’s original target of 2% and probably the main reason for the latest rise in the Bank of England’s base rate). At the same time, wages remain static. For those already on a tight budget, there simply isn’t any more money left to go round.
Compelling, and evidencing further, all of these hardships is a dramatic rise in the amount of unsecured debt Britons now have to carry. For the first time, the average person in the UK owes over £4,000 on their credit card or in unsecured loans. What’s more, unlike previously, large numbers of credit card debtors are citing general cost of living as being the primary reason why they ran up large credit card debts. In other words, we are no longer using our UK credit cards to buy luxury goods, now we need them just to get to the end of each month!
The temptation to just give up must be extremely tempting to many. Evidence that this certainly seems to be the path of least resistance being taken by many can be seen by the dramatic 66% increase in bankruptcy applications in the UK in the year to-date, with an estimated 100,000 bankruptcy applications looking to be filed.
While all of the above are indications of a tragic personal debt crisis affecting millions of us, if you are facing financial difficulties at this time, now is most certainly the time to be getting your finances in order. You need to be tightening your belts and facing up to the fact that tough times are ahead – especially as we enter the winter months, with even higher fuel bills to come. You also need to be looking after your own financial interests first. If this means that you need to ask for help from a financial consultant, then so be it.
Whatever your current financial circumstances are as you come to pay the first of your higher monthly home loan mortgage repayments, now is certainly not the time to be burying your head in the sand and hoping these problems will go away because they’re likely going to be around for awhile, so you may as well get your house in order while you can.
Richard Smith
9th August 2006
More Information:
