Homeowners staying put in recession

05/11/2009

The ongoing recession has resulted in many people deprioritising getting on the property ladder, it was claimed today (November 5th).

According to a report from Aviva and Dr Paul Keedwell, expert in environmental psychology at Cardiff University, 74 per cent of Britons will avoid moving home due to the pressures of the financial downturn.

A similar number (68 per cent) said that they saw their properties as an "emotional investment" rather than an investment "commodity".

This signals a change of attitude from pre-credit crunch times, where many people prioritised climbing the property ladder over home comforts.

Easy credit conditions prior to the 2007 onset of the crunch also led more and more people to get heavily in debt.

The tightening of the mortgage market due to the crisis therefore left many struggling to meet their loan repayments - with the result that repossessions are expected to rise from 27,000 in 2007 to 65,000 in 2009.

Dr Keedwell commented: "A surprisingly large number of people across the UK … report having a new-found emotional attachment to their homes.

"This is probably because of, rather than in spite of, the economic downturn, which has made many of us change from being house hoppers to house stoppers."

EuroDebt director Kevin Still added: "People don't want to put their home and family at risk, this is a very natural reaction to the financial climate that we are in. Many people are having to sit tight because of falling house prices, high loan-to-value mortgages or negative equity. Re-financing to settle unsecured debts is not an option for many people with financial problems who have already missed several credit card or loan payments.

"Reduced interest rates have re-focused many on reducing their debt burden and putting in place contingency plans for unplanned events like loss of income. EuroDebt has seen over 100% increase in the number of homeowners starting Debt Management Plans since the recession started."

Tags; Housing Debt and Bills, Young Family Finances, Retirement Money Problems,

Regional Debt Advice; Debt Help Cardiff, Debt Advice Cardiff,

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