Debt levels mounting in UK as borrowing hits new heights

Recent years has witnessed a lending boom in the UK, with borrowing at its highest levels since before the financial crash.

With debt levels so high it seems all sections of our society are being affected as more and more people in the UK start to struggle with the level of their debt.

Britain’s household debt mountain has reached a new peak, with UK homes now owing an average of £15,385 to credit card firms, banks and other lenders, according to the TUC.

The trade union body said household debt rose sharply in 2018 as years of austerity and wage stagnation forced households to increase their borrowing – and that has continued into 2019.

And it seems the younger generation is taking the brunt of this as typical borrowing for them starts at only 23 years old as graduates, as they are already facing £9,000 in fees alone a year.

By their late 20s we reach a borrowing peak (MoneySuperMarket) as our financial responsibilities start to kick in but people in the UK are an average of two years away from hitting the national average salary of £28,200.

However, with the average age of the first-time parent now be 32, many people are hitting a salary high only to immediately have it snatched away, either by maternity leave or the £230,000 it now costs to raise a child to their 21st birthday.

All this means that by the time we hit 35, we’re facing a financial meltdown – the peak age at which we are most likely to be juggling the cost of young children, mortgages and loan repayments for cars, holidays and weddings.

Not that borrowing stops there. In our late 30s, with larger house prices and the introduction of new stamp duty tariffs, families are less likely to take on new debt in a new home than they are to apply for a personal loan for home improvement, at least until aged 44, now the most common age for divorce.

And with the different age brackets there is a difference to what level and what kind of debt you could be in.

According to research by debt charity Step Change the people coming to them for advice are getting younger and younger, as almost two-thirds of their clients were under 40 over the past five years, and they have seen a 10% increase in the number of under 40s contacting them since 2013.

StepChange are also convinced that middle-age is when most people are likely to encounter a debt problem because of ill health. Even more than the over 60 age group.

They also state that over half of their clients in the 40 – 59 age bracket claim that ill health is the primary reason for being them in debt.

Ill health can lead to additional debt because of the loss of income from missing work, and measures that are taken to bridge the gap, such as taking out a payday loan, can make the problem worse.

A redundancy and a reduction in working hours can also lead to an increase in borrowing, and this working age group is most likely to be hit with both.

The debt burden for young people is growing, but debt is still a problem for the over 60 age group.

Research from Old Mutual Wealth, which was based on a YouGov survey of people aged 50 – 75, found that 30% of retirees were in debt and that one in ten owed over £100,000.

Debt for this age category included mortgages – with 21% of retirees still paying off their house after retirement – as well as credit and store cards (14%), and unsecured loans (6%).

The average debt owed by this age group was £34,600.

And Mark Baird (Insolvency manager at Get Help With Debt) – who has 15 years experience in the industry, says all age groups have been caught up in the debt trap in different ways.

“Twenty to 30-year olds would mainly have credit card debt or store card debts. They would have varying levels of debt. People could have around £6,000 and some can have over £20,000 of debt.

“You find that these people are not usually home owners and therefore they are struggling to clear their debts to allow them to save for a mortgage to get on the property ladder.

“They usually have just come out of university with high debts through bank loans. Not student loans but student loans they get from the bank. But you find that 20 to 30-year olds have been saddled with large debt from university and are finding it difficult to get out of that situation.

“We are in terrible economic times, so people should be trying to draw a line in the sand now so they can get rid of their debt and start saving for a house.

“Because it is a pointless exercise if you are paying for your debt and trying to save for a house. It is pointless because you are paying interest on your debts so you should clear your debts first and then save, rather than trying to clear your debts and save.

“Because your savings are not earning the kind of interest you are paying on your debt. You should get rid of your debt before you start saving,” he added.

Debt issues of 35 to 40-year olds?

“When we get to 35 to 40 years of age, these are usually people who have started families and got their foot on the property ladder, which means they have minimum equity because they have been in the house a short period of time.

“They then start a family and they start to borrow. And because they have a house, they find it easier to borrow. They can get loans, credit cards and start borrowing for the needs of the family.

“Maybe one is out of work to look after the kids, so they have to borrow again. Then when the partner returns to work, they find out that they have childcare costs.

“That eats into the budget and they are finding that they are using more credit to stay afloat. It then becomes a vicious circle because they are borrowing every month and then paying it back again. They are just paying the interest on it. These people generally have higher debts.

“These debts could be in the region of 20 to 40 thousand pounds, or even higher. They are home owners, so they have easier access to unsecured debts because lenders are more likely to lend if you have a property.

“They might want to grow their family and don’t have the money to do that or to improve where they live. It’s all about getting these people to realise that are they realistically going to be able to get out of their debt situation between five to six years or is it going to be as longer-term thing?

“Everyone thinks positively, and they never think they won’t get out of debt. The reality is that they will probably never get out of it. It is about pressing the reset button and drawing that line in the sand and trying to move on with their lives.

“Sometimes you have to stand still before moving forward. The reality is that they will fight it for years and it really is all about pressing that reset button.”

People in their 40’s and 50’s with debt issues?

“As for people in their 40’s and 50’s, they are like people in their 30’s. They are usually more established and have been fighting their debts over a few years.

“They are people who just can’t get of debt and have been fighting to pay it off. It can be more difficult because they have paid off part of their house and have equity. And on paper it looks as if they have an asset that is larger than their debt, so they are asset rich and cash poor.

“That doesn’t mean you can’t get out of the situation, but you should take advice. Everyone is different, every lender is different. You could have a lender who is good or a lender who is bad. But you will not know that yourself.

“You should just get professional help and talk to people who know what way the lender will respond. There is no real right or wrong answer, but you must look at the situation, speak to someone who knows what they are doing and how the lenders look at these things.”

People who are 60 plus?

“People who are 60 plus think that they should be retired by now and they may have more equity in their home, but you find the last thing they want to be doing is working into their 70’s.

“They need to see how they see their future going and there is no point in working until they are 75 and then looking at how to deal with their debts. Do it now and get professional advice and get it sorted out.

“Because they could just be working to repay their debts and they are getting no benefit from that.”

And remember lenders listen to advisers, negotiators and facilitators they respect. If the debtor’s case is made to them by professionals who have proven knowledge, they will do business.

Lenders know that a Get Help With Debt settlement proposal is only made after a thorough examination of all the facts.

Lenders want the issue resolved as much as you do. Get Help With Debt never makes judgments as we are all human and everyone makes mistakes! It’s how you fix those mistakes that matters.

We are Financial Conduct Authority regulated and if you find yourself in debt stress have a no obligation chat with one of our experienced advisors today on 02890 393626.

Surveys reveal Brexit hitting south of England and London house prices

Brexit has played a negative role in house prices in southern England as new data revealed downturn in the market since the 2016 referendum.

Leading up to the vote house prices across the south of England powered ahead achieving an increase of £1.04tn in the value of housing stock.

But since the June 2016 vote things have not been as impressive as the value of housing in London, the Southeast, East and Southwest regions, has risen by 4.3 per cent or £192bn, less than one-fifth of its growth in the previous three years.

The estate agent which carried out the research (Savills) states that the value of housing in London has fallen in the past year by £40bn (down 2.2 per cent), while the Southeast has dropped by £7bn (a fall of 0.5 per cent).

That is worrying because it means that over the past three years, there has been a £6bn drop in London values.

Looking at the 406 local authorities that make up the UK, Savills found 40 of these local markets had seen the value of housing stock decline since the Brexit vote, by just under £50bn.

Savills’ research included data from the Office for National Statistics, Land Registry and Registers of Scotland.

Director of residential research at Savills Lucian Cook claims political uncertainty over Brexit had fed into the housing market in the three years since the vote, potentially triggering a longer-term change in the market cycle.

“Given the extent to which London is priced relative to the rest of the country — the extent to which it had pulled away from the rest — the Brexit vote may well have been the catalyst for a shift in the market.

“We face heightened uncertainty over what a new prime minister will mean for Brexit, the economy and, critically, tax policy, which suggests the prime markets will remain price sensitive across the remainder of 2019,” he told the Financial Times.

There was more disappointing news as according to new figures property sales across cities in southern England have fallen by 13% on average since 2015.

A new Zoopla index – which looks at the UK’s 20 biggest cities – found homes have fallen by 13% in three years.

On average, sales increased by 6% across cities in northern England over the three years.

Sales in London and Cambridge are down 20% on 2015 levels.

By contrast, transactions in Liverpool have increased by 19% over the same period and those in Newcastle have increased by 5%.

As well as a big jump in sales, Liverpool also had the strongest annual house price growth in March among the 20 cities in the index, with a 5.7% year-on-year price increase taking the average property value there to £122,100.

Leicester, Manchester and Glasgow also recorded house price growth of 5% or slightly more in March but homes in southern England were not good.

And prices are likely to continue falling for another six months in the UK and for the whole of 2019 in London and the south-east, according to another industry survey.

Separate official data shows that rents are also falling, with tenants typically paying £757 a month, down from £772 a year ago, continuing a pattern of declines that began after the Brexit vote in 2016.

The Royal Institution of Chartered Surveyors (RICS) said that its poll of surveyors found a subdued picture across the UK, with sales weak and an eighth successive month of falling inquiries from buyers.

The average time it takes to sell a property remains unchanged at 19 weeks, the joint longest period since the RICS started recording the data in 2017. It added that it takes longest to sell a home in the south-east of England, at 21.5 weeks on average.

And house prices in London are falling at the fastest rate in a decade.

According to the Nationwide House Price index, prices over the first three months of 2019 in London dropped 3.8 percent in value, compared to the same period in 2018. The biggest drop since 2009.

The average house price in London during the first quarter of 2019 was £455,594, according to one of Britain’s biggest mortgage lenders.

England recorded its first annual price fall since 2012, with prices down 0.7 percent when compared to the first quarter of last year. Scotland, Wales and Northern Ireland all enjoyed price gains.

A recent survey of U.K. residential property from the Royal Institution of Chartered Surveyors (RICS) concluded that Brexit is currently the main obstacle for market activity.

More than the three quarters of estate agents that were asked, said uncertainty over how the U.K. leaves the European Union was holding back both buyers and sellers of property.

And with house prices struggling in southern England, people in negative equality will wander how they will escape from their property trap?

But what is negative equity?

A property is in negative equity if it’s worth less than the mortgage secured against it.

An example of this if you had bought a property for £180,000, with a mortgage for £165,000 and the property is now worth £100,000, you would be in negative equity by £65,000.

It’s estimated that there are around half a million properties in negative equity across the UK, although some areas are affected far more than others.

Here CD Fairfield Executive Director Phil Davison explains what www.negativeequityuk.co.uk can deliver for their clients.

“As a client of CD Fairfield all options in the UK property debt market are available to you here. We are the only company in the UK at this present time that offers that scope of service,” he added.

But many people wonder why would a bank write-down a debt?

“We get asked that question all the time and the answer is quite simple. In the first instance, the bank lent money based on affordability criteria.

“If one of our clients’ affordability has changed due to circumstances beyond their control then the banks are obliged to look at it again.”

“If you find yourself in negative equity what is the first step in the process of getting you back on track?

“A case review consists of three separate pieces of work. The first piece of work is to establish “how did we get here? “

“The second piece of work is “where are we now?” and what is our current state of affordability? And the third piece of work is what is the best way forward.”

And what protection will you have if you use CD Fairfield?

“The protection you have as a customer of CD Fairfield is that we are authorised and regulated by the Financial Conduct Authority for all our work in the UK.

“This means that we are submit to stringent regulation and reporting measures, as well as clients having access to the Financial Ombudsman Service if they are unhappy. You can have total peace of mind about the work we do,” Davison added.

Speak to Bob today on 0161 660 4403 to see what Negative Equity Solutions we can offer you.

A Fifth Of UK’s Homeowners will still be paying their mortgage in retirement

According to recent figures a fifth of UK’s homeowners will still be paying off their mortgage after they stop earning a wage – with many of them living in a negative equity house.

The startling figures reveal the legacy of interest-only loans and delayed first-time buying are starting to kick-in as these loans start coming to an end.

In worrying figures, in the UK alone around three million people now expect to still be repaying their home loan after the current state retirement age of 65 – research from online broker L & C Mortgages has found.

High house prices, interest-only and part interest-only borrowing, and getting on the housing ladder later than previous generations all play their part in delaying the day homeowners pay off the last of their debts.

And a third of mortgage holders believe they will be older than they had expected by the time they clear their debt – often because they’ve had to cover the costs of raising and supporting a family.  It seems the bank of Mum and Dad is still going strong!

And around 60 per cent of those who will still have an outstanding home loan in retirement have no plan in place as they get older for paying off their mortgage once they stop earning – which is a worrying statistic.

That’s a major concern as it could leave many of the UK’s older generations having to exit the property market in retirement altogether.

And David Hollingworth from L&C said: “The fact that people increasingly have to work beyond their standard retirement age to pay off their mortgage is a concern.

“Many will see a dip in income post-retirement which could pose affordability issues for older borrowers. Although homeowners will, and should, continue to aspire to pay off their mortgage before retirement, the reality for many could mean having a mortgage for longer.

“It’s clear that homeowners will shift their priorities depending on family needs. For example, so many first time buyers are reliant on the Bank of Mum and Dad. However there still needs to be a clear focus on the repayment of the mortgage, to avoid reaching a point that could force the sale of the family home.”

And more worrying news as 40 per cent of all those on an interest-only or part interest-only mortgage believe they will not be able to pay the remaining sum once their term ends.

When former interest-only mortgage holders have managed to pay off their loan, almost half relied on endowment policies and a third used savings or investments to do it.

“Repayment of an interest-only mortgage that once seemed a million miles away may now be looming large for those that haven’t set capital aside,” adds Hollingworth.

“That may force the need to refinance and extend the mortgage term. Mortgage options for those that can demonstrate ongoing affordability are growing in number so it makes sense to seek advice sooner rather than later.”

CD Fairfield has a 99% score with www.reviews.co.uk and excellent relationships with lenders throughout the UK. As such, we’re here to lend a helping hand and offer solutions to free you from your negative equity.

And CD Fairfield Director Tom Cardwell explains why it is a good idea to sort out your negative equity house sooner rather than later.

“If it is an issue, you have to deal with it sooner rather than later. Hopefully, the stigma attached to the issue has reduced over time.

“We are very active in putting out good content in terms of what is happening in the industry and where the mortgage market is at.

“Ans it would have been very difficult to purchase a property 10 or 12 years ago and not be in negative equity today.

“So it wasn’t that people in negative equity have made some horrendous financial choice, or some reckless financial decision.

“They simply bought a property at the wrong time. It was just a matter of timing. First-time buyers in the last six or seven years don’t have this problem. They don’t have to worry about it.

“And it certainly is not something that was restricted to those with low incomes. We have clients where the household income was well in excess of one hundred thousand pounds.

“But they still have a debt issue and it is something that they will have to address. The first thing to do is recognise there is a problem.

“The second thing to do is seek some assistance and the third thing you have to remember is that the client was a victim of an economic crash and it is not something they have done.

“If someone is worried about negative equity? No matter what the level of their negative equity they should get in touch with us. We can put their mind at ease. We can explain to them exactly what their position is and we don’t engage in flannel or false hopes. In an empathetic fashion, we tell people where they stand.”

Here are some reviews from the people we have helped.

M Anderson

“Like many people, my house had been purchased at a time when banks were handing money out like sweets. We had an interest only mortgage and when my marriage ended, we needed a way to separate financially.

“A colleague recommended Negative Equity NI to us, they do every bit of the work required, removing the stress from you. The staff were great and kept in regular contact at each stage.

“In the end, I have paid 11% of the shortfall, with the result that I can now sleep a lot easier! I would and have recommended NENI to others and would continue to do so.”

C Weir

“Lesley has been so helpful, She has shown knowledge on the subject of bankruptcy, very personable and showed me empathy when I was stressed with bankruptcy proceedings. Also all my questions were answered in a timely manner and nothing seemed to much trouble for her. I would have been lost, without her expertise.”

M Bennett

“I would recommend Negative Equity to anyone. I bought a two-bedroom semi-d at the height of the boom for a very high figure. Then came the crash. I got married, had a child and the house was to small for us but not worth even half what I paid for it when put on the market 10 years on.

“The bank simply wouldn’t deal with us so we approached Negative Equity NI. I just wish I had heard of them sooner! They were well worth their fees – spending around £4k saved us over £50k as they engaged with the bank to negotiate our shortfall to a manageable figure we should have paid off in a few years.

“We’re also out of the house, having been able to buy a new one as part of the process. That would never have happened if we’d tried to embark on this on our own.

“We were quite nervous and tentative about going down this route but it certainly paid off and we are very grateful to Tom and Lesley for all their attention and assistance throughout the process. They have lifted a millstone from around our necks and we can now move on.

R Mark

“I first came across negative equity NI while watching tv, they had an advert on! I thought surely this is a con or too good to be true… ITS NOT!!

“Myself and my husband bought back in the boom, the house itself was worth half of what we paid for it and we felt like we were stuck with the negative equity. We are now free!!!

“From the moment we met with the team we knew we were going to get out of the hole we were stuck in, and just last week this happened.

“We got over 60% of our negative equity written off. The team know exactly what they are doing, extremely professional and have fantastic knowledge and the ability to get brilliant results.

“I would like to say a huge thank you to all the team who worked tirelessly to get this end result. Thank you again”

Speak to Bob today on 0161 660 4403 to see how we can help you with your negative equity house.

Northern Ireland debt figures are reaching new heights

Debt in Northern Ireland, like the rest of the UK, is rising with the average credit card debt per household standing at £2,653 in April 2019 according to www.themoneycharity.org.uk.

On top of that at the end of April people in the UK owed £1,637 billion in personal debt (Office for Budget Responsibility’s) and household debt is forecast to reach £2.4235 trillion in 2023-24.

And Credit card debt is the most common form of unsecured debt people are struggling with.

Almost two thirds of people in NI – 67.2% – who look for debt advice are dealing with more than £8000 in credit card debt they cannot afford.

And the number of people defaulting on their credit card debts soared in the first three months of this year, according to figures from the Bank of England.

Credit card lenders reported that defaults jumped to their highest level since the first half of 2017, following a deteriorating trend that dates back to last summer.

The default rate, which is calculated by the central bank based on a balance of responses from lenders, increased to 22.9% in the first quarter from 12.7% in the last quarter of 2018 and -11.2% in the third quarter of the same year. A positive figure indicates that the number of defaults has increased.

The last time the credit card default rate rose above 20% was in the second quarter of 2017, when it hit 25.4%.

With wage growth stagnating since the financial crisis ten years ago – there has been a -5.5% change in the average real wage figures since the pre-cash peak in February 2008- it is no surprise that people have been forced to turn to credit cards just to make ends meet.

And with no sign of wage growth, the situation will only spiral downward. To make matters worse, credit lending companies are releasing new offers to lure customers in. Deals like buy now pay later and 0% interest deals for short periods of time.

But with these deals it can be easy to misunderstand the complicated terms and conditions or overspend while trying to make the most of the offer. And if you are not careful to make repayments on time and in full, you can end up with your credit card debt getting out of control with interest payments accumulating and charges mounting.

Where can I get help?

Get Help With Debt typically achieves up to 90% debt write-off for their clients, many of whom had feared that they were beyond help.

To get the process started you can take our online assessment before booking your free, no-obligation consultation with one of our debt advisors at our Belfast office – beside the SSE Arena – to find out how we can help you?

Once you have spoken with your advisor by phone, we can present you with a range of bespoke solutions that will help you make an informed decision about what is the best way forward for you. We offer a range of options to meet the needs of our clients.

What options do we have to free you from your debt struggles?

1 Negotiated agreement with creditors

This is a way to reduce your debt repayment by explaining to your creditors you are having difficulties – but want to repay your debt as best as you can.

Creditors are likely to be open to negotiated reduced payments once you have proven hardships.

2 IVA

An Individual Voluntary Arrangement Is a formal agreement between you and your creditor and is seen as an alternative to bankruptcy.

In an IVA you make an offer to your creditors to repay a portion of your debt over a set period, which is generally five years for monthly contribution based IVA’s.  You can also propose a shorter IVA based on a lump sum offer.

If your IVA is approved by your creditors and you successfully pay all the funds you proposed, then at the end of the IVA any balances left on your debts are written off.

The IVA has to be voted on by your creditors and agreed by 75% by value of those creditors who vote.

3 Debt Relief Order

A DRO is a simplified, quicker and cheaper alternative to bankruptcy in the UK, suitable for debtors who have few or no assets (less than £1000 and not homeowners) and little disposable income (less than £50 per month).

The maximum level of debt that is allowed for this is £20000.

4 Debt Management Plan

With a debt management plan, you will have one monthly payment to worry about and you’ll only have to pay whatever is affordable for you until your debts have been cleared.

A DMA will also secure a lower overall interest rate than you had been on before.

5 Bankruptcy

There is no maximum or minimum amount of debt that can be included in a bankruptcy. However, a creditor can only issue a bankruptcy petition against you if you owe them £5000 or more.

Almost all debts can be included, some exceptions are student loans, court fines, or maintenance arrears, child support arrears, debts built up through fraud or debts arising from a personal injury claim.

Most bankrupts are discharged from their debts after one year but there can be exceptions to this. If you have surplus monthly income you are expected to pay this to your bankruptcy for three years.

You can petition for your own bankruptcy or a creditor can make you bankrupt but only if you owe them more than £5000.

6 Debt re-organisation/consolidation loan

A debt consolidation loan means taking out a new loan to pay off a number of liabilities and consumer debts, generally unsecured ones. In effect, multiple debts are combined into a single, larger piece of debt, usually with more favourable pay-off terms.

And CD Fairfield’s Tom Cardwell (Director) explains what they offer people who are struggling with debt.

“At Get Help with Debt we know that financial problems can affect people in all walks of life. That is why it is our aim is to support you and give you a stress-free journey away from their financial hardship.

“The first step of this journey is a chat with one of our debt advisors. Through the years our staff have overseen 35000 IVA’s with a combined experience of over 30 years dealing with this issue.

“We offer telephone and face to face advice totally free of charge. You will then be a given a dedicated and experienced case manager who will take away the stress of dealing with those dreaded letters and telephone calls from your creditors. Chat with us today to find out the best option for you,” he added.

What our clients have said about our service?

“I was finding it difficult to sleep with the stress of dealing with my creditors, but once I spoke to Craig he put me at ease that there were options available. Each step of the IVA process was fully explained and everyone who has worked on my case have been very kind and supportive. Thank you so much for giving me a chance to put an end to my debt problems.” Mr D Moore (Ballymena)

“We were having a difficult time and thought we would have to go bankrupt but were fearful of losing our home. We realised an IVA was a better option to deal with our debts and protect our home, so we were so happy it was approved. A special thank you to Emma who has been so helpful and a pillar of strength for me! Thanks to everyone for all your hard work.” E Marshall (Lisburn)

“Since my initial chat the whole service has been fantastic. I was totally lost with no idea what to do with my debts and Laura was so kind at sorting through my paperwork to figure everything out for me. I know it is only the start of my IVA but I now have hope that I will be debt free soon.” S Glynn (Dungannon)

“Thanks for taking away the hassle and worry of dealing with my creditors and I am determined to see this through. Everything was easier than I thought it was going to be, and it was nice to know that when you said we would get the paperwork that day we got it that day! “ L McAllister (Belfast)

“Everyone so kind and helpful and nothing is never an issue. Big thanks to Luke at getting things sorted quicker near the end and I cannot believe I am now debt free.” J Downey (Newry)

“It all started with a phone call from a strange number that I was reluctant to answer but am thankful I did. My IVA was sorted in a few weeks after struggling for years. You have been lifesavers and a massive weight has been lifted from me. Thank you thank you thank you.” B Lowry (Belfast)

“Just wanted to say a big thanks to you for getting my finances back on track I couldn’t have done it without your assistance. Thanks again to Craig I would highly recommend him for advice if you are struggling with your debts.” J Jamison (Cookstown)

“A great organisation with non-judgemental staff. They listened to my concerns and worries and alleviated the stress that I had. From day one everything went smoothly. Thanks to all the team for your help.” M Rodgers (Bangor)

What do Get Help With Debt deliver for their clients?

Lenders listen to advisers, negotiators and facilitators they respect. If the debtor’s case is made to them by professionals who have proven knowledge, they will do business.

Lenders know that a Get Help With Debt settlement proposal is only made after a thorough examination of all the facts.

Lenders want the issue resolved as much as you do. Get Help With Debt never makes judgments as we are all human and everyone makes mistakes! It’s how you fix those mistakes that matters.

We are Financial Conduct Authority regulated and if you find yourself in debt stress have a no obligation chat with one of our experienced advisors today on 02890 393626.

13 Tips for Getting out of Debt

It’s so easy to get into debt these days – it’s frightening.

Figures announced in May (www.themoneycharity.org.uk) show that the average total debt per household in the UK, including mortgages, was £59,713, while people as a whole in the UK owed £1,637 billion at the end of April.

Most people experience problem debts at some point in their lives, and it can be difficult to get the situation back under control if you don’t get a handle on it.

But there are ways of cutting back to get your debt under control.

Here are thirteen tips from www.gethelpwithdebt.co.uk to get yourself out of debt.

1 Consolidate and transfer your debts

Taking out yet another loan to deal with your debts might not seem like the best idea in the world, but by consolidating all your debts to a single credit card or other loan may be precisely what you need, provided that you do so responsibly.

If you have a decent credit score, you should be able to sign up for a credit card that offers 0% interest on balance transfers.

This way, you won’t have to pay any interest on your debts for a period of time, provided that you pay everything off within the given timeframe. But you will be charged a fee to do this and if you don’t pay off your debts within the 0% period, the total amount you owe will increase.

If you are looking for free advice call 02890 393626 to speak to one of our advisors.

2 Cancel your credit cards

As soon as you have consolidated and transferred all of your debts onto a balance transfer credit card, it is a good idea to cancel any other credit cards that you have.

By getting rid of your credit cards, it should be easier to avoid spending in the future, and you’ll likely save on interest fees as well.

A credit card can be financially beneficial if used correctly, but if used irresponsibly your debts could spiral out of control.

3 Resist impulse buying

Impulse buying is the enemy – don’t ever forget that! You should take impulse buying into account when you start your saving strategy.

If you see something that you want, determine whether your budget allows it, and start saving as required.

Most importantly, avoid buying anything on credit, even if it is interest-free for a given amount of time.

4 Make sure you have a spending plan

Having a spending plan isn’t quite the same thing as budgeting, and you can usually provide yourself with a modest reward each month when you stick to the plan.

Everyone’s spending plan will differ, but the first thing you have do is to know your disposable income that you have left over after your monthly expenses and setting some of it aside for later.

5 Prioritise your debts

Some people increase all their minimum payments by just a little bit, but that way your payments only drop by a small amount each month. You can make more noticeable progress by making a making a big payment to just one of your accounts each month until that debt is completely repaid.

In the meantime, make the minimum on all your other accounts. Then do the same for another debt, and another until they’re all paid off.

6 Have an emergency fund

Your debt can quickly spiral out of control to the point that there’s no more money available left to borrow when it comes to paying an unforeseen bill.

Whether it’s an emergency repair for your home or car, a parking fine or anything else, we recommend you have some money saved up to bail you out of what can quickly become a disastrous situation.

However, instead of relying on a credit card or bank account overdraft, start saving up right away in preparation for that rainy day.

7 Seek out a debt management plan

In severe cases, you may need to turn to a formal debt management plan. Debt management plans are typically negotiated by a third party.

You can only opt for a debt management plan for debts that are not secured against property.

A debt management plan is an agreement between a debtor and a creditor that addresses the terms of an outstanding debt.

DMP help reduce outstanding, unsecured debts over time to help the debtor regain control of their finances. The process can secure a lower overall interest rate, longer repayment terms, or an overall reduction in the debt itself.

Consider an IVA

An Individual Voluntary Arrangement (or IVA), is a fixed term form of debt help, consisting of a repayment plan, allowing those with serious debt problems the opportunity to settle the outstanding balances to their creditors.

IVAs are available to all people who live in Northern Ireland, England or Wales, who are insolvent and are seeking to protect themselves and their assets from the threat of legal action and bankruptcy.

Once an IVA has been approved by creditors they are legally obligated to cease all legal action and freeze all interest or late payment charges.

With a predetermined ‘fixed’ repayment period (usually 60 months), an IVA enables the applicant to make payments based on affordability rather than their contractual obligations. However if you have access to third party funds, an IVA can be completed within six months.

On successful completion of the IVA, the creditors are legally obliged to write-off any outstanding debt, leaving the applicant completely free of all the debts included in the IVA.

If you are looking for free advice on an IVA contact one of our advisors on 02890 393626.

9 Cut your outgoings

A few small changes can make a big change to your monthly outgoings.

There are many small ways to save money, but some of the most effective include turning down your thermostat, upgrading to energy-efficient light bulbs and appliances and not leaving things on standby.

Also shop around for a better deal on your utility bills, internet and phone connection and mobile service provider.

10 Take on some extra work

Increasing your income could be worth looking into. Even a very modest increase in your income might help.

If doing a few extra hours in your day job isn’t an option, you could consider a part-time weekend or evening job. If this is done over a short-term period it could be a quick way to pay off your debts.

11 Positive attitude

If you’ve been saving for a while and it feels like you’re not making much headway. Don’t panic!! If you’ve settled into a regular saving habit, you’re doing a great job, but you have to stick at it.

It’s about sticking to it consistently without losing focus on the financial targets you have set yourself.

12 Change your mindset

Don’t feel like you’re being deprived but be proud of what you’re accomplishing and keep building long term and keep setting small goals that you can hit.

Replace the feeling of ‘missing out’ with the ‘opportunity to save’. Try to focus on how far you’ve come and not how far you have to go.

13 Boosting your credit score

Don’t forget to continue checking your credit score and keeping an eye on where you can improve your score.

Remember that regular credit payments that will help build good credit when it comes to getting a mortgage. So use it to build your credit rating, but try to have paid it off six months before you intend to apply for a mortgage.

But if your debt worry is too much and you are looking for an urgent solution to your debt crisis, Get Help With Debt (part of the CD Fairfield Capital Group) operates under the regulatory framework of the Financial Conduct Authority and the Chartered Accountants Regulatory Board which offers you the highest degree of protection and peace of mind.

Every client receives a bespoke, personally tailored service and proposal that meets their specific needs. It also meets the criteria of their lender.

We have developed a strong insight and relationships with all the main UK lenders, due to our transparency and consistent approach.

We offer a range of services that have a track record of successful outcomes that is unmatched in our sector.

If you find yourself in debt stress have a no obligation chat with one of our experienced advisors today on 028 9039 3626.

North East England still trying to recover from ‘fake’ promises

Just before the house price bubble burst in the summer of 2008 buy-to-let seminar firms were promoting the north east of England as the holy grail for Landlords.

Investors were signed-up with the promise that they would become “property millionaires”. It was all too good to be true but many UK and Northern Ireland investors were caught-up in the ‘dream’ and invested their money.

From 2002, these companies advertised free “workshops” in newspapers, on the radio and via a mailshot campaigns. Thousands signed up, sometimes handing over £10,000s in seminar, membership and sourcing fees.

Once hooked by the promise of property wealth, the companies stoked the frenzy even further, promising a fast road to riches via sales of flats bought “off-plan” in Spain and Florida, as well as the UK. These properties were often little more than a developer’s intention for the future.

Since 2008 many of these firms went bust, leaving many would-be landlords nursing losses ranging from about £50,000 to more than £500,000.

After the firms went to the wall, thousands of property owners were left with assets worth far less than they had paid for them and in the current economic climate they are struggling to financially recover.

Some had title to, or had paid deposits on, properties which remain unfinished or not even started. Others were not worth the purchase price and remain in negative equity.

Investors from 2005-2008 were hit with the double-whammy of paying for overpriced properties back then and now the North East property market is still well behind other regions, with price growth hardly registering as prices are now 10% lower than they were in 2007, which is 12 years ago (according to the Office of National Statistics).

The Demos-PwC Good Growth for Cities Index 2018 measures the performance of 42 of the UK’s largest cities against 10 indicators including employment, health, income and skills, housing affordability and environmental factors.

The latest index has Newcastle Middlesbrough/Stockton and Sunderland all in the bottom 10, with all three areas being ranked poorly on income levels, health and home ownership.

Newcastle has also improved from 38th in the UK 10 years ago to 33rd now, though Sunderland is now ranked joint bottom with Swansea.

The prospects of getting a return on these investments are not favourable and investors are losing money. Many properties are in run-down areas and are hard to sell as the ‘dream makers’ oversold the locations when they were trying to off-load them.

Landlord Debt Advisory has grown into the UK’s leading Non-Statutory and Statutory property debt specialist.

We are ideally placed to represent clients in all aspects of property debt having unparalleled  experience in negotiating sales and settlements for Landlords with insurmountable negative equity throughout out the UK.

Since 2013 we have completed debt settlements leading to over £70million of debt written down for their clients.

As a CD Fairfield Capital brand, Landlord Debt Advisory operate under the regulatory framework of both the Financial Conduct Authority and Chartered Accountants Ireland, this gives our clients the highest possible degree of protection and comfort.

Every client receives a bespoke, personally tailored service and proposal that meet their specific needs and the criteria of their lenders.

Landlord Debt Advisory has developed strong insight and relationships with all the main UK lenders, due to our transparency and consistent approach.

We have been assisting clients with these problematic portfolios – advising them on which properties to retain and which to resolve or sell.

As a company we have successfully completed sale and settlement cases for 100% of all Landlords who have instructed us to assist them since 2013.

CD Fairfield Managing Director Phil Davison said: “There won’t be a situation that we have not seen before and there is an answer to any situation. It depends on the client and what he or she wants to do.

“Before our clients make any decisions we are going to look at all of the options available to them. Using our experience and tried and tested case review process we’ll then make the appropriate recommendation but it is up to the client to decide what way we move forward from there.

“The other option after being informed of all options is that they take no action and wait and see what happens with the market long term. At the end of the day none of us know what is going to happen eight to ten years down the line.

“Looking at some parts of the UK that haven’t recovered from 2008 it does not look great. So, for the sake of having a conversation with us and being better informed it makes sense to get in touch. Our team is comprised of CeMAP qualified mortgage advisers, ex-bank staff, Chartered Accountants, an Insolvency Practitioner, asset management and legal professionals who have completed 100s of cases for Landlords and homeowners. We currently have over 700 ongoing cases, with well north of 1000 properties being worked on as we speak.

“Naturally people who chose to get into investment are doing it looking for a positive outcome. In most cases, they get that but in some they don’t. We are here to assist when it hasn’t worked out.

“It’s sad that many clients have been clinging on for many years to buy to let investments that will never work out. Unscrupulous property sourcing and investment firms have a lot to answer for.

“We tell people what their options are which can include selling some negative equity properties and negotiating affordable settlements in respect of the shortfall or re-financing to reduce the cost of debt to put the client into a sustainable long term position.

“It’s not about doom-mongering. Situations can improve and get worse. but this is about informing people and giving them the right advice.”

If you are concerned about any of your properties in your portfolio that are in Negative Equity see how we can help you today on 0161 222 4311.