33% more Scottish homeowners are seeking debt help than five years ago

The Debt Advisory Centre Scotland is reporting a 33% increase in the proportion of homeowners seeking their help since the financial crisis began in 2008.

In 2008, homeowners accounted for 21% of the Debt Advisory Centre Scotland’s clients. This figure has increased to 28% this year, with increased living costs cited as a major factor behind homeowners’ debt problems. With wages consistently failing to rise in line with the cost of living, many homeowners are feeling their incomes squeezed.

Currently interest rates are at an all time low - the Bank of England base rate remains at just 0.5% - and the Debt Advisory Centre warns that when interest rates do eventually rise, many more homeowners could find themselves in difficulty. Melanie Taylor of the Debt Advisory Centre Scotland urged those facing debt problems to seek help immediately:

“Problems with debt are always worrying, but they can be even more serious when you fear you may lose your home. Thankfully there is nearly always something you can do to stop things getting to that stage.

“Getting help as soon as possible also gives interest and charges less time to grow, so it really is worth contacting a debt adviser as soon as the problem starts.”

This information comes just days after the debt management firm PayPlan revealed their figures, showing that the demographic of people with debt problems is widening. Jason Eaves, director of PayPlan, said:

“Many families have seen their budgets squeezed. Some parts of the country are in recovery while other parts are still in decline; but even in more affluent areas if wage increases have not matched the rising cost of living then debt is still a problem.”

These figures appear to confirm the warnings offered by financial experts when the financial crisis began - that too many people were given mortgages that they couldn’t properly afford. With signs that mortgage lending is increasing, the importance of good financial planning on the part of prospective homeowners is becoming more apparent.