Figures released by Citizens Advice showed how many people are struggling to meet their borrowing commitments and are putting their major acquisition – their home – on the line.
Shane Craig, managing director of Paymentcare, said: “This alarming news flags up the growing number of people who are putting themselves at risk in order to get a toehold on the property ladder, with young people being particularly vulnerable. It’s a sad reflection of the ‘live now pay later’ culture which looks like it’s starting to take its toll on the nation.”
Crucially, this begs the question of how they would cope if they were no longer working due to sickness or involuntary unemployment. Latest jobless figures back up this concern, with the number of people out of work now standing at 1.7 million, up 93,000 on the quarter and 280,000 over the year.
Pressure to spend, spend, spend and acquire the trappings of modern living is leading many young people down the dark alley of financial disaster. Even if they are aware of mortgage payment protection insurance (MPPI), the costs charged by high street lenders could deter them from taking out a policy in favour of being able to support the cost of their lifestyle.
Craig commented: “MPPI can provide a lifeline for homeowners who have no savings to fall back on, should the worst happen. This is particularly true for first-time buyers as they struggle to afford house prices that continue to outstrip salaries.
“Whilst the debate about responsible lending strategies - or lack of - trundles on, borrowers need to remember that lenders are out to make money."
