Millions of British consumers are using personal loan and credit card debt in order to cover their short-term housing costs, according to a new report.
Figures compiled by Moneysupermarket.com show that almost seven per cent of adults in the UK have been “forced” to use unsecured credit to meet their mortgage demands or pay their rent.
The figures do not bode well and reflect the fact that many families are looking for short-term solutions to what are likely to be long-term debt management difficulties.
“Having a roof over your head has to be your top priority but to be funding that with a loan you might default on or with a credit card that will eventually charge you interest of over 15 per cent isn’t the solution in the long term,” said Tim Moss, head of loans and debt at Moneysupermarket.com.
Howard Archer from the analyst firm Global Insight said last week that “distressed” borrowing is likely to become more common across the country as the year goes on.
By Dan Mather