Homeowners are putting off dealing with debt problems

Robyn Hall

November 16, 2012

Figures released by MoneyPlus show the number of homeowners taking out individual voluntary arrangements has declined as a proportion of the company’s new cases in 2012 from 38.5% to 32.5% while the total number of cases involving homeowners had dropped by 27% during the year.

Stephen Quinn, MoneyPlus Group director, said: “Because mortgage costs have stayed low many homeowners have been putting off dealing with their debt problems. But an increase in mortgage costs coupled with rising household bills and static salaries would create the right conditions for a perfect storm of debt issues.”

The statement follows this week’s release of October inflation rates as measured by the Consumer Price Index which showed a jump from 2.2% to 2.7% and an increase in the Retail Price Index, which includes housing costs, from 2.6% to 3.2%.

Quinn added: “The average disposable income of an individual voluntary arrangement client has fallen by 37% since 2008. Household bills have been increasing rapidly due largely to rising fuel and utility costs while salaries and tax benefits have stagnated.

“Homeowners shouldn’t wait for mortgage rates to rise before they confront their debt problems. Acting now will give them the best chance of getting out of the debt trap.”

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