Debt consolidation for those who spend too much on a house?

Individuals may need to seek debt consolidation methods because they are underestimating the cost of buying a house.

Research carried out by money.co.uk discovered 21 per cent of those purchasing homes ended up spending more on their property than they had initially intended to. This added cost averaged out at £23,000, which highlights the potential downfalls awaiting those looking to get onto the market. In addition to this, consumers forked out an extra £8,000 during the first year of owning the dwelling on repairs and refurbishment.

With 23 per cent of respondents admitting they have not budgeted correctly for this, it means over a fifth are having to part with in excess of £30,000 more than they anticipated having to. And it seems many are getting themselves in to long-term debt in order to make their dream move come true, as they are using personal loans (15 per cent), credit cards (27 per cent) and extended mortgages (21 per cent) to cover these extra costs.

It means many people may struggle to become debt free as these charges linger on for over a year for 65 per cent of those involved. Chris Morling, managing director of money.co.uk, noted the results demonstrate the importance of having strict budgeting when considering taking the plunge. “It is all too easy to overlook expenses and end up in a precarious financial position. Households with debt piled upon debt are most likely to be at risk during tough economic times,” he added.

Sarah Beeny, presenter of Channel 4 show Property Ladder, noted she was amazed by the number of Britons who are “jumping in feet first” without given the move the proper considerations. And Jo Parsley, advocacy and media officer for Credit Action, recently advised individuals to try and live within their means if they want to try and clear their debts.

Posted by Joe White