Impact of crunch gauged by new bank customer survey

21/09/2009

A region-by-region survey of the effects of the financial crisis on consumer confidence has been released by Yorkshire Bank.

According to the figures, rising unemployment has led to a much more conservative attitude among the public - with 43 per cent having delayed plans to change jobs or careers due to the current market uncertainty.

Official labour market data released by the government last week showed that the UK's jobless total is at a 14-year high of almost 2.5 million.

Meanwhile, Yorkshire Bank showed resilient consumer sentiment regarding the property market, which has been hit hard by the credit crunch.

House prices have fallen by more than ten per cent in many regions, with repossessions also up and the mortgage market tighter than before.

The research showed that homebuyers in Scotland are the most optimistic in the UK, with seven in ten saying that the financial conditions have not led to them changing their plans.

Residents of the north west of England were similarly upbeat at 59 per cent - although only 42 per cent of Welsh people had not switched their strategies.

Gary Lumby, head of retail banking for Yorkshire Bank, said: "Inevitably, the current economic situation has got people thinking twice about their long term plans, especially when it comes to big financial commitments."

He added: "If you are worried about money it is also important that you seek help."

Kevin Still, EuroDebt director, added: "There is a danger that very low interest rates lull people into a false sense of security and that household budgets could be squeezed if rates start to rise in 2010, especially where household running costs remain high. EuroDebt would echo the advice that if you are worried about money then seek help.

"Many people in financial difficulty either have no equity in their property or have impaired credit files and are unable to obtain a re-mortgage in a market where lenders have only just started to open the coffers again. I think there will need to be a period of stability coming out of recession where those struggling to meet contractual repayments on their debts need stable employment and long-term arrangements with their creditors to make a dent in accumulated debts without further borrowing.

"Self-management schemes are one option, more structured managed debt solutions like a Debt Management Plan or an IVA may represent alternatives with a higher probability of a successful outcome."

Tags; Housing Debt and Bills, Young Family Finances,

Regional Debt Advice; Debt Help Yorkshire,

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