According to Pat Boyden, partner in the business recovery services practice at PricewaterhouseCoopers, people are switching from unsecured loans to mortgage debt, but may be forced to return to using money on their credit cards to supplement their income.
In a report on the fears about a possible mortgage debt crisis in The Guardian, it was claimed that the number of repossessions in the UK rose to 30 per cent – an eight-year high. Boyden claimed that, against a backdrop of higher inflation and a modest growth in wages, UK borrowers were facing a struggle.
Jasvinder Jhumat, commercial director at Bridgingloans
.com, said: “It is a sad state of affairs if this is the case, as this is an extreme route to take and you will need to be in financial trouble to do that. It’s a desperate situation to get like that in the first place and isn’t a good option.
We always take affordability into account, it doesn’t matter whether we want to make a quick turnaround on an application – if they can’t afford it, we don’t lend to them.”
