Debt is Hitting Home for Many

The credit crunch has started to have a very real effect on the affordability of running a home in Britain today with an increasing number of households struggling to meet even the basic cost of living.

Rising mortgage rates coupled with the spiraling cost of household bills has meant that many individuals are now left facing unmanageable debt for the first time.

According to a report commissioned by the BBC, debt is now the biggest single issue driving people to the Citizens Advice Bureau for advice, accounting for almost a third of the 5.7million queries they face a year.

What’s more, in the first two months of this year alone the Citizens Advice Bureau dealt with over 215,000 new queries specifically relating to difficulties with debt, with those surrounding mortgage arrears up 35% on 2007 figures.

Speaking to the BBC Teresa Perchard, Director of policy for the CAB, commented: "It is a worrying trend that our bureau are reporting very sharp increases in the number of mortgage arrears problems they are dealing with.”

"The combination of big increases in household bills, especially fuel, and rising housing costs is putting additional pressure on people's finances when they are already stretched to the limit."

However, despite the CAB reporting rising problems with debt in almost all other areas, queries relating to credit cards were actually down in January and February this year.

While this could potentially be a reflection of British consumers finally tightening their purse strings, it is more likely to be a direct result of the credit industry tightening both its lending criteria and credit limits, effectively making credit card debt more difficult to achieve.

The CAB reported that queries relating to overdraft debt increased by 7% over this same period, only suggesting that rather than being resolved, the issue of excessive spending has simply been shifted to another medium.

Whether mortgage, bill or credit related, unmanageable debt is always best tackled sooner rather than later. The Citizens Advice Bureau recommends that anyone struggling with debt should contact them for advice, information and guidance. Visit http://www.citizensadvice.org.uk/ to locate your nearest branch.