The increase in interest rates, coupled with rising house prices and the decrease in the average consumers disposable income is increasingly squeezing new buyers out of the market and making it more difficult for existing house owners to trade up, said Howard Archer, Global Insights Chief UK and Global Economist.
This, in turn, has had a pronounced effect on home loans; the continuing rise in inflation deterring homeowners from borrowing.
Existing mortgages repayments have risen, with many homeowners struggling to meet repayments, leading to an increase of 30% in the annual number of Individual Voluntary Agreements.
A large number of homeowners have turned to credit cards in order to manage their finances through difficult circumstances, only to find themselves trapped in a circle of debt that threatens to undermine their credit ratings and restrict future applications for further loans or borrowing.
Some homeowners, however, have found a way to break that circle of debt. The emergence of mortgage brokers who specialise in remortgages for those with bad or negative credit ratings has offered a solution to potential insolvency.
Putting the...
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