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For immediate release: Thursday,
2nd November, 2006
1 IN 4 PREDICT HOUSE PRICE CRASH WITHIN 18 MONTHS
- Debt crisis in Britain forces 1 in 3 to delay house purchase in wake of interest rate hikes -
(London, 07/12/06)
The first cracks in Britain’s personal debt laden economy were revealed today as debt solutions consultancy, Thomas Charles (www.thomascharles.com) announced a widespread lack of faith in the stability of the UK housing market.
According to research published today, almost 1 in 4 (24%), or 11 million UK adults, expect property prices to crash within 18 months.
The research, conducted in conjunction with YouGov with 2,353 respondents, also revealed that almost 1 in 5 (19%), or around 9 million adults, expect a crash to come within 12 months, with 1 in 3 (29%), or 13.5 million adults, expecting a crash within 24 months.
Regionally, Londoners were found to be most concerned with 28% expecting a crash within 18 months while the South West remain cautiously optimistic at 18%.
Young adults, 18 – 29 were shown to have the least faith in the market, with 27% predicting a crash within 18 months, compared with 23% of 30 – 50 years olds and 21% of over 50s.
The research also revealed the recent rise in interest rates to 5% in November as a contributing factor to the predicted market slow down.
When asked ‘by how long do you think rising interest rates will delay your first step onto the property ladder’, 30% of non-home owners, or 4 million adults in the UK, reported some delay, with almost 1 in 5 (19%), equivalent to over 2.5 million UK adults, reporting a delay of 3 years or more – enough to have a significant impact on the housing market.
Regionally, the hitherto soaring London market was shown to have seen the greatest impact as a result of the November hikes. 35% of Londoners reported some delay in their house purchasing plans, followed closely by the West Midlands at 34%. Figures were lower in Scotland where 16% report a delay and a comparatively small 6% report a delay of at least 3 years.
Again, young adults, 18 – 29, were shown to be most affected by the hike with 44% reporting some delay in their first step onto the property ladder, compared with 29% of 30 – 50 year olds, and 5% of over 50s.
James Falla, Director of Thomas Charles, commented:
“The research shows that a high proportion of UK residents have lost their faith in the stability of the UK housing market. With interest rates rising and bad debt soaring, fewer and fewer people can afford to gamble with a mortgage. Young people are particularly affected since they are likely to have substantial unsecured debt and no equity, making it almost impossible to take that first step onto the housing ladder.
We may begin to see a trend whereby those with equity tied up in their homes may begin to sell up to preserve their capital, sparking a crash in the near future.”
Earlier this year, Thomas Charles revealed that the number of adults in the UK in over £10k of unsecured debt had risen to 8.4 million with 2.5 million struggling to meet repayments 1.1 million on the brink of insolvency.
Consumers wishing to contact Thomas Charles for advice on debt can do so via the company’s website (www.thomascharles.com) or by phone on 0800 072 5988.
CONSUMER DEBT:
Key stats
- Number of people in serious debt has increased by 0.4 million in 6 months
- 8.4 million or 1 in 5 adults have unsecured debts of over £10k
- 2.5 million adults have regular debt repayment problems
- 1 in 3 women struggling with debt repayments
- 1.4 million adults to declare themselves bankrupt or take out an IVA
Top tips
- Don’t bury your head in the sand. Try working out your financial position using the debt-help-uk.org.uk ‘debt wizard’.
- Consider transferring credit card debt to a 0% card while you deal with more pressing bills, such as any council tax or mortgage payments. But don’t use this as an excuse to run up more debt elsewhere.
- Don’t take out other loans to pay off the original debt or use a consolidation loan. If you must do this, be disciplined and don’t use the new loan money for anything else.
- Talk to your creditors about structuring a realistic repayment plan; the CCCS can help (0800 138 1111).
- If you cannot do a repayment plan and you do not want to go bankrupt then try an IVA. Visit iva.co.uk or call the IVA helpline (0800 197 48 38).
- If you want to consider bankruptcy then try the Citizens Advice Bureau (citizensadvice.org.uk) Useful contacts
- CCCS: 0800 138 1111 (www.cccs.co.uk)
- IVA Helpline: 0800 197 48 38
- IVA Wizard: iva.co.uk
- CAB: citizensadvice.org.uk
- Debt help: 0800 0789 056 (debt-help-uk.org.uk)
About Thomas Charles & Co Ltd
Thomas Charles & Co Ltd was set up in 2004. The Joint Managing Director, James Falla has 7 years experience in the insolvency and debt management industry and was involved in the set up of debt help specialists, Brookvale Group PLC, listed on OFEX since 2001.
Thomas Charles operates throughout England and Wales with its head office in Acton (West London). It has a personal, consultative approach to debt management. It focuses primarily on providing formal solutions for debt problems including Individual Voluntary Arrangement and Bankruptcy. However, it will also provide advice around informal debt repayment plans where appropriate. It works with third party Insolvency Practitioners around the UK.
Notes to Editor:
All figures, unless otherwise stated, are from research commissioned by Thomas Charles and Co and conducted by YouGov Plc.
Property research: Total sample size was 2,353 adults. Fieldwork was undertaken between 22nd - 24th November 2006. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Debt research: Total sample size was 2,322 adults. Fieldwork was undertaken between 11th - 13th October 2006. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Please download this press release as pdf below to view some key tables from the research. (all figures are percentages unless otherwise stated)
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