Homeownership `responsible for rise in bankruptcy`
07/06/2007
Britain`s obsession with owning a home is partially responsible for the rise in bankruptcy over the past few years, a financial advice website has claimed.
According to the Thrifty Scot, the introduction of lower down-payments, higher interest, fees for closing and administration, and complicated mortgage terms have contributed to Britons being "over-mortgaged", as well as in debt and vulnerable to bankruptcy.
"This explains why so many households who considered themselves middle class or comfortable only five years ago are struggling to pay their debts or have already petitioned for bankruptcy," the site remarked.
However, the Thrifty Scot added that, despite the amount of mortgage debt, property assets continue to be worth more than what people owe - so far.
In the first quarter of 2007, there were 30,075 insolvencies - which includes both bankruptcy and individual voluntary arrangements - on a seasonally adjusted basis, according to Credit Action.
