New research carried out by price comparison site Moneyextra reveals that over half (56%) of homeowners admit they are suffering from spiraling money problems even though more than a third (37%) will not commit to lifestyle changes that could lift them out of debt. While Londoners are the most hesitant of all Brits to downsize (23%), the capital's inhabitants are also half as likely to have control of their finances as those in Manchester and Newcastle.
Despite the call by experts to downsize, Brits remain fixed on keeping their lifestyle the way it is. Like the character Hyacinth Bucket from the much-loved 90's sitcom, it's women who suffer most from the idea of downsizing. Over half of the women surveyed (56%), compared to 50 per cent of men, admit their home reflects who they are and downsizing would have a detrimental impact on their ‘status'.
Seven out of ten (66%) people admit they care what the neighbours think and two thirds (59%) of us believe others judge us by the size and value of our home.
And it's seems the snobbery factor associated with downsizing is more present in the South of England compared to the north. Over half of Londoners (55%) view downsizing to pay debt as an indication of failure, while only 40 per cent of those living in the North-most parts of England share this opinion.
Those living in Cambridge and Norwich seem most adaptable, as almost half (46%) say they would adjust to downsizing compared to less than a third (31%) of the rest of the nation.
It seems Scots are the most financially prudent; if their cost of living increased by 10 per cent, only three per cent of Scots wouldn't be able to pay their mortgage. This is in contrast to the rest of the nation, where one in ten said they'd struggle in the same situation.
The research was carried out alongside Moneyextra.com's Quarterly Housing Index, which reveals that mortgage availability is significantly lower now compared to this time last year. In today's market, borrowers looking for a £150k property with a deposit of £22.5k (15%) only have access to 8 per cent of the mortgage market, compared to 20 per cent in the second quarter 2008. For potential landlords the outlook is even bleaker, with nearly all buy-to-let mortgages requiring a minimum 25 per cent deposit.
Richard Mason of Moneyextra.com said, "It's absurd that struggling homeowners aren't prepared to downsize simply to save face - these people need a wake up call! While downsizing might be considered taboo, the reality is that taking a step back can actually save up to £550 per month in mortgage payments. The British ‘stiff upper lip' is costing thousands of people their homes and I urge those facing debt arrears to downsize while they can. Surely it's better to downsize on your own terms than face repossession and risk losing everything."
Mortgage Introducer adds "On the other hand, by the time you have paid for a HIP, estate agents fees, stamp duty and removal costs the chances are it would be more than a year before you were any better off overall even if you could save £550 per month."
