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The Perils of the Property Ladder: Has Anyone Noticed the Silence?
There was a time when every conversation was focussed on property and every other TV programme was about property makeovers. Everybody wanted to get into property and those already on the ladder seemed fixated on becoming wealthy overnight. Remember those media-nominated millionaires who bought property for thousands and sold it for a million? How excited we all were, rich - with hardly any effort. But recently it's been rather quiet. Those who have yet to buy their first home have become sceptical, if not bored by chasing impossibly affordable homes and those who have bought property have become nervous, if not by the commentary that house prices are falling, but by the fact that they have bought property on top of other debts and the realisation that repayments are becoming more difficult. According to the Department of Trade and Industry, bankruptcies are still on the increase, up almost a third on the previous year. In the latest debt statistics by Credit Action, UK economist Vicky Redwood from Capital Economics states that the level of personal debt is at breaking point: "It is unlikely that the numbers have peaked but we estimate that households must be feeling the pain of borrowing too much. People are paying the equivalent of about 20 per cent of their disposable income on interest and debt repayments - the highest since 1990." In a survey by the Citizens' Advice Bureau (CAB), the three most common reasons for debt problems were quoted as: * Sudden change in personal circumstances - resulting typically from job loss, relationship breakdown or illness; * Low income - the consequences of living for a long time on a low level of income; and * Over-commitment - in some cases related to money mismanagement. It is the third reason that is often highlighted in the context of mortgage borrowing. In a press release regarding the Chancellor's proposals to introduce cheaper mortgages, Keith Tondeur, Director of Credit Action warned that: "At first glance the offer of help to first time buyers sounds useful. However this scheme comes at a time when after several years of steep rises the market is cooling. One question that we should be asking is whether this is being done to keep the housing market buoyant so that people feel confident and therefore keep on spending". "House prices are undoubtedly too high for many people to afford which explains why numbers of first time buyers have been falling, with the average age of a first time buyer rising sharply. This scheme could therefore, if care is not taken, create a false market and lead to first time buyers taking on a large amount of long term debt that they could well struggle to repay." The seduction of the property market may cause a vicious circle of debt: if people borrow more than they can afford, they may damage their credit record if repayments cannot be met. An adverse credit record will brand the borrower "sub-prime", and is likely to prompt less favourable credit options later in life. It is true that products such non-standard mortgages, adverse loans and adverse credit cards serve a purpose, but their rates will always be less favourable than standard products. In addition to self-inflicted debt, it is also possible for your credit record to be manipulated by other parties. In June earlier this year, Callcredit issued a warning to guard against identity fraud when moving house. "Homeowners who fail to check their credit file before they move and register themselves on the Electoral Roll once they have moved are at risk from: * Identity fraud - a fraudster could obtain enough financial information about you from your rubbish to run up debts at your old address without your knowledge. People who just cut up cards and don't tell their lender are particularly at risk from this type of fraud. * Credit refusal - a person's credit history has to add up to the lender when you apply for credit, if you don't appear on the Electoral Roll at your current address it will make it more difficult to get credit." If you're thinking about buying a house, try the following sites for starting your own detective work in finding a good mortgage: * Make sure your credit record is in good shape: ( http://www.checkmyfile.com/ ) * Don't be lazy, shop around for the best mortgage: ( http://www.moneynet.co.uk/ ) Make sure you keep your finances flexible; ensure you know what you can afford and for how long you can afford it. What was the best mortgage, current account, ISA account five years ago, may not be performing as effectively now. About Rachel: Rachel writes for the personal finance blog Cashzilla: http://www.cashzilla.co.uk Cashzilla is a personalfinanosaurus. "Rachel" means sheep in Hebrew: "little lamb" or "one with purity". Cashzilla means financially savvy with great fiery ferocity.
MORE RESOURCES: A Potential Mamdani Mayorship Strikes Fear in the Real Estate Industry The New York Times Senate Passes Tax Bill With Major Wins for Real Estate National Association of REALTORS® Detroit sues cryptocurrency-based real estate firm to correct hundreds of property violations The Detroit News City of Detroit files record nuisance lawsuit against crypto-based real estate firm ClickOnDetroit | WDIV Local 4 Meet HBJ’s 2025 real estate power players Hartford Business Journal 4 real estate investors shared with us an overlooked advantage to buying property - Business Insider Compass ‘has not and will not adhere’ to Clear Cooperation Real Estate News by RealEstateNews.com NexPoint Diversified Real Estate Trust Makes Application to Cease to be a Reporting Issuer in Canada PR Newswire California real estate pro joins Norton Rose Fulbright’s LA office as partner | United States | Global law firm Norton Rose Fulbright Mountain Real Estate Mountain News Can You Time the Real Estate Market? The Source Weekly - Bend 'Keep it moving': HGTV cancels TV show hosted by Georgia couple after 4 seasons Savannah Morning News Celebrity Agent Sues National Association of Realtors Over House Listings The New York Times EQT Real Estate acquires 2 million square foot logistics portfolio in Northern California’s Central Valley Cision News Massachusetts Awards $46.8 Million in Grants for Water Infrastructure Projects Boston Real Estate Times Wellness Real Estate Set to Top $1 Trillion | Florida Realtors REAL ESTATE SPOTLIGHT: Atlantic Group Real Estate Takes You on a Tour of Stunning Property on Banana River Space Coast Daily Navigating The Market And Reveals Key Trends In Real Estate Harlem World Magazine Wilton Real Estate Report: June 20-26, 2025 — Three Prime Rte. 7 Commercial Lots Sold for $15.3 Million; 6 Homes Change Hands Good Morning Wilton Avon real estate agent involved in dozens of lawsuits faces loss of license Inside INdiana Business New commissions case pulls in brokerages that settled Real Estate News by RealEstateNews.com Manhattan Real Estate Market Report: 2Q 2025 Inhabit by Corcoran California real estate empire faces fire sale risk in court fight SiliconValley.com Schroder European Real Estate Investment Trust (LON:SERE) Trading Down 3.4% - Time to Sell? MarketBeat Hyatt Announces Agreement to Sell Playa’s Owned Real Estate Portfolio to Tortuga for $2.0 Billion Hyatt Newsroom Real Estate Briefs Naples Florida Weekly Egypt Sherrod Shares Heartbreaking News About HGTV's 'Married to Real Estate' Country Living Magazine Institutional Real Estate, Inc. Announces Acquisition of U.K.-based Lyndon Publishing 2 Limited Business Wire Real estate expert expects ‘more capital’ to enter South Florida if Mamdani becomes NYC mayor Fox Business The dreaded Zillow ban is finally here. Here's what you can do Business Insider NexPoint Real Estate Trust Streamlines Operations: What US Investors Need to Know About Canadian Exit Stock Titan Real Estate Transactions The Provincetown Independent Hardin County real estate taxes due July 9 Kenton Times Detroit Sues Real Estate Firm That Owns Hundreds of Homes in The City With Health and Safety Violations Deadline Detroit TPG Angelo Gordon reshuffles Asia real estate leadership Private Equity Real Estate | PERE Best of Colorado 2025: Real Estate ColoradoBiz There’s one elite group propping up the Manhattan real estate market right now — everyone else is sitting on their hands New York Post Real Estate Update: Markets Level As Fed Commits To Steady Policy Guidance Huntsville Business Journal California passes sweeping reform to expedite new housing Real Estate News by RealEstateNews.com Texas ERS commits $435m to real estate funds in April, May Institutional Real Estate, Inc. Matthews Real Estate Negotiates Sale of Woodmont Village in Metro Atlanta - Shopping Center Business Matthews Real Estate Negotiates Sale of Woodmont Village in Metro Atlanta Shopping Center Business Why Big Brands Are Flocking to Prescott Arizona | Commercial Real Estate with Matt Fish - Signals AZ Detroit sues blockchain real estate company over poor conditions at hundreds of rentals Crain's Detroit Business IPE RA Real Estate APAC Briefing: US policy uncertainty pushes Australian super funds to Europe IPE Real Assets FHFA director says Fed chair should be removed ‘for cause’ Real Estate News by RealEstateNews.com Best REIT ETFs: Top real estate funds for investors Yahoo Finance The Ritz Effect: Do record real estate sales transform a market? Observer Local News A Long, Winding Path to Selling Real Estate in the Hudson Valley The New York Times These Real Estate Dividend Stocks Are Money-Printing Machines The Motley Fool Quantum computing implications for commercial real estate Data Center Dynamics Why a Hill Country city is saying yes to $9M in tax breaks for hotel San Antonio Express-News |
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