August 2011

Households Finances Deteriorate As Debt Levels Rise

A survey of 1,500 UK adults by financial information service Markit has revealed that 40% of households saw their financial situation worsen between July and August.  The survey also revealed that household finances worsened at the fastest rate since 2009 due to a combination of rising debt levels and falling income.

Whilst all income groups and demographics showed a deteriorating financial situation, there was a clear geographical disparity with the fastest rates of financial deterioration coming in the three northern regions.

Increase In Household Bills Discourages Savers

Figures released by British Bankers Association (BBA) suggest that an increase in the cost of living may be having a negative impact on savings. Personal deposits into banks rose by £6.1bn in the first half of 2011 compared to £15.9bn during the same period in 2010.                   

Repossessions Fall As Predictions Look Bleak

The Council of Mortgage Lenders (CML) has revealed 9,000 homes were repossessed in the second quarter of 2011, 100 fewer than the previous quarter. Despite this fall, the CML is standing by its prediction that there will be 40,000 repossessions this year, 3,700 up on 2010.  One of the key factors behind the pessimistic forecast is that mortgage arrears continues to climb, with the number of cases between 1.5% and 2.5% of the outstanding balance increasing 300 from the previous quarter to 78,500.