Tough times for borrowers in the run up to Christmas
December 30, 2007
According to a recent report borrowers are set to face tough times in the run up to Christmas this year, with increased difficulties when it comes to getting credit. The problems are set to continue well into 2008 according to officials, as lenders tighten up on their lending policies and try to protect themselves in the wake of the credit crunch that has swept across the UK in recent months.
The report is called Precious Plastic 2008, and is a PricewaterhouseCoopers study into credit conditions for the coming year. The report suggests that things are set to get even tougher for the many homeowners who are due to come off cheap fixed rate mortgage deals in the coming months, which will add to the financial pressure in an environment where it has become increasingly difficult to get credit.
Richard Thompson, partner at PricewaterhouseCoopers, stated: “There are tough times ahead for both consumers and credit card companies. Banks are continuing to take action in response to the rise in consumer debt by tightening their credit acceptance policies. Many consumers will find it increasingly difficult to obtain credit in the run-up to Christmas.”
The report also suggests that adults in the UK now owe an average £33,000 including mortgage, which is twice the average amount in 2000, just seven years ago. Lenders in all sectors, including loans and credit cards, have really tightened up on their lending policies over recent months, and some lenders have even withdrawn their unsecured personal loans from the market, adding to the difficulties that many potential borrowers face when it comes to getting finance.
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