Stephen Quinn, director of insolvency at MoneyPlus Group, one of the UK’s leading debt management companies, issued the warning during the Mortgage Business Expo at Excel in London.
Figures released by MoneyPlus show the number of homeowners taking out individual voluntary arrangements (IVAs) has declined as a proportion of the company’s new cases in 2012, from 38.5 per cent to 32.5 per cent, while the total number of cases involving homeowners has dropped by 27 per cent during the year.
Stephen Quinn said:
“The average disposable income of an IVA client has fallen by 37 per cent since 2008. Household bills have been increasing rapidly, due largely to rising fuel and utility costs, while salaries and tax benefits have stagnated.
“Because mortgage costs have stayed low, many homeowners have been putting off dealing with their debt problems. But an increase in mortgage costs, coupled with rising household bills and static salaries, would create the right conditions for a perfect storm of debt issues.
“Homeowners shouldn’t wait for mortgage rates to rise before they confront their debt problems. Acting now will give them the best chance of getting out of the debt trap.”
MoneyPlus says homeowners have an average total debt of almost £45,500, compared to an average of less than £29,250 for tenants.
