The slow rate of recovery in the UK economy and uncertainty over the near future, has put many potential home buyers off the idea of taking out a home owner loan and buying a property. Despite this, there are still plenty of people who are in a position to move house, but are unable to sell their existing house.

As a result of this, many potential movers are being forced to keep their existing home, taking out a let to buy loan and renting their current home, in order to avoid losing the house they want.

The news comes from the Association of Residential Letting Agents (ARLA) who say that they have seen a significant increase in what have become known as “reluctant landlords”. Over the course of the three months to the end of September this year, ARLA members saw an increase in privately rented properties of around 34 per cent.

Although this idea can work well for individuals as long as they have a suitable tenant and the rent is sufficient to cover the cost of the existing home owner loan, there can of course, be problems and if a reluctant landlord suffers a void in the tenancy, they could be left having to pay for two large loans, their main home owner loan or mortgage, as well as their let to buy loan.

Ian Potter of ARLA said “While home owners forced to let out their home can reap significant benefits by holding on to their property, becoming a landlord for the first time can be a stressful experience.”

“Successful letting isn’t simply about finding a tenant, signing a contract and handing over the keys. There are important steps every landlord should take when letting out a property that was once their home.”

The total number and amount of new loans being offered increased slightly throughout the month of October, with an increase of £1.3 billion worth of new loans, or an increase of 0.1 per cent over the previous twelve months average, according to the latest figures from the Bank of England.

The twelve month growth rate for loans across the market increased by 0.1 per cent to reach 0.8 per cent annualised growth and the three month figure increased by 0.4 per cent to reach the same level as the annual growth rate.

The total amount of loans on property, including home owner loans, mortgages and secured loans, increased by £1.0 billion throughout the month of October, compared with just £0.2 billion in September.

Overall, the number of home owner loans and mortgages for both house purchase and remortgage cases were largely unchanged for the previous month, although the number of people switching their home owner loan to look for a better deal has increased above the six month average figure.

Consumer credit loans, including unsecured loans, increased by £0.3 billion during the month of October, compared with an increase of just £0.1 billion throughout the month of September and the twelve month average increase for consumer credit lending increased by 0.4 per cent to reach 0.6 per cent, which is the highest level since September 2009.

Out of the total for consumer credit lending, the whole amount was made up by credit card lending. Other areas of this market, such as unsecured loans and other types of consumer credit loans, remained unchanged from the previous month, or the six or twelve month average figures for unsecured loans.

In the past, it was always the tradition that it was the man in the household who looked after the finances and anything like taking out a new loan. The man went out to work each day and earned the money, whilst the wife stayed at home and was given a housekeeping allowance and not allowed to think about the finances.

Before I get shot down by all the feminists out there, it is nice to see that things are shifting significantly in the other direction recently.

 In many cases, the man of the house has made such a mess of the household finances, taking out personal loans and running up credit card bills, particularly since the onset of the credit crunch, that many women are now taking over the household finances.

The news comes from the group, Women in Debt, who offer loan and debt advice to women. The group’s director, Nicola Scowen says that a growing number of women are now taking control of their financial situation.

In many cases, taking on board existing loans and credit card debts, as well as balancing the everyday bills, can be a daunting prospect and could easily lead to a build up of personal loan arrears and missed repayments.

As a result of this, more and more women are now taking out debt consolidation loans in order to reduce the monthly outgoing son a variety of unsecured loans and credit card balances.

Commenting on the change, Ms Scowen said “Many men now take the opportunity to take a step back from the detail of the finances, leaving the women to do the juggling and make ends meet, which often leads them into debt as they try to please everyone and not let anyone down whilst keeping theior struggles to themselves.”

This week has been designated “Financial Planning Week” and as part of the awareness of individuals financial situations and loan debts, Credit Expert from Experian is trying to encourage people in the UIK to take more responsibility for their financial position.

The week comes as a new survey from Experian has just revealed that many people in the 18 to 34 age range are not in control of their finances or money at all and many are completely dependant on taking out personal loans and using credit cards to manage their regular monthly bills and spending habits.

The survey found that more than half of young people spend on a spontaneous basis, buying things as soon as they see them, without giving much consideration to how much money they have available.

Furthermore, just over one third of people in this age range admit to regularly using their credit card on a monthly basis in order to tie them over until their next pay day.

Experian have described this behaviour as being a “creditaholic”, with more and more young people taking out large personal loans and running up credit card bills just to fund the lifestyle and luxury items which they want, rather than saving up for them over a period of time.

According to the survey, somewhere in the region of 34 per cent of all 18 to 34 year olds have already accrued debts of between £2,500 and £5,000 on credit cards, personal loans, store cards and overdrafts.

 Experian are concerned about the growing level of loan and credit card debt amongst younger people and are therefore taking the opportunity of using financial planning week to encourage people to be more responsible in their loan and other borrowing habits and therefore avoid getting themselves into serious, unmanageable loan debt in the future.

Although there has been slight reduction in the number of house repossessions through loan arrears and defaults over the course of the past year or so, there are still great concerns for the future for borrowers who are currently struggling to keep up with their home owner loan or secured loan repayments.

Proposed Government spending cuts could force many borrowers into the position where they are unable to keep up with their home owner loan repayments and face the possibility of repossession, even though they are currently not experiencing any difficulty with their loan.

In order to try and reduce the number of loan repossessions going forward, the Building Societies Association (BSA) has just launched a new report which looks at alternatives to repossession for those borrowers who fall into arrears and default on their home owner loan or mortgage.

The report was commissioned by the BSA and written by John Howard and was launched yesterday (Tuesday 23rd November), to a group including loan companies, insurers, voluntary bodies, public sector organisations and government representatives.

The report looks into additional ways of protecting borrowers from repossession on their loan and includes a long term safety net scheme, as well as considering a more robust mortgage rescue scheme and alternative types of tenure and compulsory insurance for loan customers.

Paul Broadhead of the BSA said “We believe that now is the time to carry out a holistic review of the safety nets available to protect borrowers in difficulties, from both a public and private perspective.”

“Any new arrangements are likely to require some form of subsidy from the State and the rules in the changes on benefits would be a good opportunity to consider a new scheme, at a time when we could be on the verge of repossession figures rising again to record highs.”