Page last updated at 09:26 GMT, Monday, 11 January 2010

Many homes 'using credit cards to pay mortgage'

Advertisement

Kay Boycott: "Anyone using credit cards to pay for housing should see this as a massive warning bell"

Up to one million households have borrowed money on a credit card to pay their mortgage or rent over the past year, a charity's study suggests.

Housing charity Shelter said this figure represented 6% of UK homes.

Shelter said people in lower social groups had been most likely to need to use their credit cards, but that the middle classes had also been affected.

The charity said the figure was a "shocking discovery". Its survey questioned 2,022 people.

Seek advice

Shelter said it urged people who were struggling to keep up with their housing costs to urgently seek expert advice.

"If people are already struggling to the extent that they fear losing their home, increasing credit card debt cannot be the answer," said Kay Boycott, Shelter's director of policy and campaigns.

Its survey suggested that for lower social groups, the number of people resorting to using their credit cards over the past 12 months rose to 8%, while the figure for middle class people totalled 4%.

Shelter said many people who had resorted to using their credit cards were now at risk of becoming homeless, as in some cases defaulting on their credit card repayments might lead to their homes being repossessed.

Last year, Citizens Advice reported that some lenders were increasingly going to court to obtain a charging order, which secures a previously unsecured debt on the borrower's property.

While cases of actual repossessions following this were rare, such a move would make it possible for a lender to ask a court to order the sale of a property to recover a debt.

Citizens Advice found that since 2000 there had been a 722% rise in the number of charging order applications by unsecured creditors.

The charity also found that 74% of the 132,000 applications in 2007 resulted in charging orders being made.



Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific