Over the course of the past few years, the housing and home owner loan market has been in turmoil, which has led to a significant decline in the number of people in the UK who are taking out home owner loans and mortgages and buying their own property.

The latest figures and predictions from the National Housing Federation have suggested that the level of home ownership in the UK is likely to fall to just 63.8 per cent over the next decade, as potential buyers are unable, or unwilling to take out a home owner loan, or be able to afford a home of their own.

This will mean that home ownership levels in the UK will reach their lowest level since the mid 1980’s and high house prices and a lack of suitable home owner loan products could mean that an entire generation is locked out of the housing market.

Back in 2001, home ownership was at its peak, with 72.5 per cent of the population owning their own home, but the credit crunch has led to much tighter lending criteria from banks and building societies, which means that many individuals are unable to be accepted for the home owner loan they want.

Deposit requirements have also had a large impact on people’s ability to buy a home. Back in 2001, 95 per cent and even 100 per cent loans were readily available, but with the average deposit level now standing at around 20 per cent, many would be buyers simply cannot afford to save the required amount to meet loan to value restrictions.

David Orr of the National Housing Federation said “With home ownership in decline, rents rising rapidly and social housing waiting lists at a record high, it’s time to face up to the fact that we have a totally dysfunctional housing market.”

The unsecured loan market in the UK is highly competitive place, with many lenders all trying to offer the best deal on a cheap loan. As a result of this, loan rates from lenders are constantly being changed and reduced in an attempt to attract new customers.

Despite this increasing loan competition, many consumers in the UK are still failing to shop around for the best deal on an unsecured loan, choosing instead to take the first loan option which may be presented to them, in many cases from their local bank, or existing loan company.

Although some lenders do offer preferential rates for existing customers on their loan products, it is still a worth while exercise to shop around and compare the different loan products from different providers in order to ensure that you are getting the best possible deal available.

Finding the best cheap loan deals to suit an individual’s personal circumstances is far easier these days than it used to be, due to the increase in the number of price comparison websites and professional loan brokers who are able to offer help and advice on the best type of loan, as well as finding the best deal to suit a particular individual.

The difference between shopping around or a cheap loan deal and taking the first loan to be offered, cold make a huge difference in the monthly loan repayments an interest rate charged, which could result in the borrower saving hundreds or even thousands of pounds on their loan.

One financial expert commented “When it comes to personal loans many people are looking for the best deal possible in the current climate. However, the way to get the best deal is to take time and compare different loans, especially at a time when lenders have started to reduce interest rates.”

Debt Relief Orders (DRO’s) have just been introduced to Northern Ireland as an alternative to bankruptcy for those individuals who are unable to manage their personal loans and other debts and they seem to be proving very popular, according to the figures from the Consumer Credit Counselling service (CCCS).

DRO’s have been available in England, Scotland and Wales for some time now, but were only introduced to Northern Ireland in June this year. However, since their introduction there have been twice as many cases as there were in mainland Britain, for people struggling with their personal loan and credit card debts.

The CCCS have said that DRO’s were recommended to 13.9 per cent of those loan customers in Northern Ireland who contacted them for help during July, compared with just 6 per cent in England and Wales.

A DRO is an alternative to bankruptcy, which is designed for people with low incomes an fewer assets, as well as lower levels of unsecured loan debts and who probably would not be able to afford a bankruptcy petition.

In order to qualify for a DRO, a persona must have less than £15,000 in outstanding debts on unsecured loans and credit cards and have no more than £300 worth of assets, apart from a car of up to £1,000. They must also have less than £50 of disposable income left at the end of the month, after their loan repayments and other commitments have been made.

Debbie Mills of the CCCS in Northern Ireland said “The fact that we are seeing more than twice the level of demand or DRO’s as in other parts of the UK shows how valuable their introduction will be in helping people who are struggling with loan debt in Northern Ireland.”

Over the course of recent months, the overall level of personal debt held by consumers in the UK on unsecured loans and credit cards has been steadily falling as more and more individuals make extra efforts to repay their outstanding debts due to the uncertain economic future of the country.

The latest figures to be released by the Finance and Leasing Association (FLA) have revealed that this trend has continued, as the figures for June this year show a continued reduction in unsecured loans and credit card borrowing.

The figures have shown that the total amount of unsecured loan and credit card borrowing fell by 3 per cent during the month of June and by 1 per cent over the course of the second three months of the year.

The FLA has said that this drop reflects the reduction in consumer confidence as people are reluctant to spend money on the high street in the current economic conditions. The amount of borrowing on in store loans and credit actually fell by 14 per cent in June this year, compared with the same period 12 months earlier.

The only area of finance which has not seen a reduction is that of car loans and finance, which has remained fairly constant whilst other loan areas have been declining.

Geraldine Kilkelly, economist at the Finance and Leasing Association said “We are still waiting for significant signs of recovery in the consumer finance markets. During the past twelve months we have seen some markets performing better than others. In spite of a relatively weak performance n June, car loans and finance volumes have remained stable over the last year.”

“The decline in high street spending has affected the retail store credit market.”

The Office of Fair Trading (OFT) has issued a warning to consumers who may have applied for a personal loan, to be careful and check out the company they are dealing with, following a large increase in the number of complaints about loan companies taking up front fees through money transfer schemes and not providing a loan.

Over the course of the past twelve months, the OFT has seen a 50 per cent increase in the number of complaints where a loan applicant has been contacted and asked to send money up front for the personal loan via a money transfer scheme.

The OFT has received a total of 3.167 such complaints over the past twelve months to the end of June this year, where borrowers have been contacted and told they have been offered a loan and all they need to do is to transfer some money as an up front fee.

Potential borrowers have been advised to be extremely careful about bogus loan companies who take fees and never produce a loan, as they are unlikely to be able to get their money back once the transfer has been made. The OFT has given a few tips to borrowers:

Borrowers should be careful about anyone who cold calls them offering a loan, particularly if they claim that the loan is guaranteed and no credit score has been carried out.

Do some research into the company by checking their consumer credit licence, finding genuine addresses and telephone numbers in the UK and contacting the company directly to ensure this is who has contacted them and do not part with any money prior to the loan funds being transferred.

Anyone who feels they have been a victim of a loan scam of this nature should report the matter to consumer direct.