he number of homeowners experienced over the past few
taking out secured loans is months is seen by analysts to
set to slow down over the have discouraged homeowners from
next five years according to taking out loans secured against
analysts at Datamonitor. Over the the increased value of their
past five years, the market for homes. Secured loans are normally
secured loans has increased by seen as a sensible way to borrow
over 50%, however predictions for certain expensive items, such
indicate that loans secured as home improvements, due to the
against property will only higher borrowing limits and
increase at a rate of 5.3% a year cheaper interest rates that are
up to 2009. Last year, "0"16bn generally charged compared with
was borrowed by homeowners an unsecured loan.
secured against the value of
their property but according to In the past it has been common to
Datamonitor this will rise to see that while the value of homes
"0"14bn a year by 2009. has risen, many families have
Datamonitor stated that the increased their mortgage
slowing demand for loans borrowing to release money tied
reflected a public perception of up in the property, to pay off
an ongoing "soft landing" for the other debts or make expensive
UK housing market. Maya Imberg of purchases. This mortgage equity
Datamonitor said "‘"°The rapid withdrawal generated
growth rates the secured lending approximately "0"1 billion for
market has enjoyed over the last homeowners"0"1 between 2001
five years are set to and 2004. The recent perceptions
cool"0"1". that a return to the risks of
negative equity occurring as a
The slowing in house price result of buyers needing to
inflation that has been obtain increasingly large initial
mortgages to purchase property * Others: 11%
combined with the slowing down in
house prices, has caused many to UK website moneynet has evolved
be more cautious in their its range of services to
borrowing. integrate the societal changes in
debt management, by bringing out
In July 2005, the total UK a price comparison service for
personal debt stood at "0"114 debt consolidation loans, as part
billion and has been spiraling of its loan awareness campaign.
out of control at a rate of Whilst moneynet offers a
"0"1every four minutes. The comprehensive loans guide,
number of bankruptcy applications moneyfacts has also taken account
and home repossessions is also on of consumer behaviour and
the increase. concern, with a dedicated loans
glossary. In the US, lowermybills
According to mortgage-arrears provides a loan price comparison
counselors, White Horse Mortgage service.
Services, the main reasons for
people falling behind on their Additional resources:
loan repayment include: href="http://www.moneynet.co.uk/p
* Absorbing: a reduced income ersonal-loan-guide/index.shtml">h
such as loss of overtime 26% ttp://www.moneynet.co.uk/personal
* Financial mismanagement: 25% -loan-guide/index.shtml
* Redundancy and unemployment: 14% href="http://www.moneynet.co.uk/l
* Accident, sickness or injury: oans/index.shtml">http://www.mone
12% ynet.co.uk/loans/index.shtml
* Relationship breakdown: 7% * Over-indebtedness: 5% href="http://www.moneyfacts.co.uk
/guides/guide_loans.asp">http://w loans.asp
ww.moneyfacts.co.uk/guides/guide_
About the Author:
Rachel drives a Fiat Punto and also writes for the personal finance blog Cashzilla: http://www.cashzilla.co.uk
Source: www.isnare.com
