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Burden of debt heavy in 10pc of homes
ALMOST one in 10 households in Yorkshire spend at least a quarter of their income paying off debts such as loans and credit cards.
A new report reveals the scale of the debt burden shouldered by households across the region and warns the cost of meeting debt and mortgage payments means large numbers are “financially vulnerable.”
It estimates 163,000 households in Yorkshire, or 9.1 per cent, spend at least a quarter of their total income repaying credit cards, personal loans and other unsecured debts.
This is higher than the national average; of the figures available for other regions, only London, the North East and North West have a higher percentage.
The report, produced by the Financial Inclusion Centre (FIC) for debt charity, the Consumer Credit Counselling Service (CCCS), also highlights how more than one in five of Yorkshire households which took out a mortgage between 2005 and 2010 are having some form of difficulty meeting payments.
Around 35 per cent of householders in the region do not have enough equity in their homes to be able to move.
The report warns: “Our research implies that the level of UK households facing potential difficulties with mortgage payments has been seriously downplayed. In particular, an alarming number of mortgages taken out in the five years in the run up to the financial crisis and recession are showing signs of being in financial difficulty.”
There are also concerns people are failing to build-up an adequate financial cushion to cope with unexpected bills.
The report says more needs to be done to raise public awareness and to promote access to affordable credit to protect people from “predatory lending.”
Delroy Corinaldi, CCCS director of external affairs said: “With so many financially vulnerable households in the region it is vital that people in Yorkshire know where to turn if they fall into difficulty. Taking early action is the key.”
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Saturday 26 May 2012
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