In Con-Lib Britain inflation is rising fast, increasing the likelihood of early interest rate rises; tax rises and massive public spending cuts are also inevitably on the way in next month’s emergency budget, which will lead to further unemployment rises and household incomes coming under even more pressure. PPR says the results of its survey provide a timely reminder of the precarious situation still facing many UK homeowners.
And younger homeowners seem particularly vulnerable, with over six out of 10 of respondents under 30 reporting having difficulties with their personal finances in the past year already, ranging from overdraft and credit card payments to pensions and savings. Six out of 10 of respondents in this group also believe they can survive for less than three months financially if they lose their job.
More than one in ten homeowners feel financially more secure after the recent election which led to a hung parliament and the Con-Lib alliance Government. Nearly one in four of homeowners now feel considerably less financially secure as Britain faces up to a new age of “austerity” after the elections.
Arguably the most worrying finding from the research was that just over half of homeowners see low interest rates and borrowing costs as the most important cornerstone in securing their financial future and the single most important factor in them keeping the roof over their heads.
Given that interest rates and borrowing costs are the lowest they will ever be, costs can only go up from here, and inflation is running consistently above trend recently.
Nick Hopkinson, director of Property Portfolio Rescue, said: “These results not only reveal how vulnerable homeowners of all ages are to falling into financial difficulties if they are made redundant, but they also indicate a worrying apathy towards taking the necessary measures to safeguard themselves against this.
“It appears that people have not heeded the clear warnings from a recession that has already plunged 2.5 million into unemployment, and the situation is only set to worsen as the new coalition government embarks on its deficit cutting offensive.
"It can take just a short period of hardship for people to lose their home. I would advice all homeowners who don’t have a plan to think hard and fast about their finances and how they will keep their house if the worst happens and they lose their job in “austerity Britain”.
“Many respondents to our survey believed that low interest rates are the most important factor for their personal financial security – shockingly naïve thinking as Retail Prices are already currently growing at 5.3% making rate rises very likely before the end of this year according to many experts.”
The research also revealed that only 31% of homeowners had redundancy insurance or any kind of financial plan should they or their partner be made redundant, and many had no other source of funds to fall back on.
Despite this, only one third of respondents were actually concerned about losing their homes and 18% said they would never consider arranging a financial plan to safeguard against redundancy.
