Up to five million homeowners could be in negative equity by the end of this year if house prices continue to fall, research has claimed
Andy Thwaites, director of insight at GfK Financial, said: "The shift to negative equity has the potential to be a mammoth welfare disaster for the nation, particularly when so much of the population has recently relied on the capital appreciation in their home to supplement their lifestyle, consolidate debts and fund retirement.The reality is that if there are further job cuts, the problem will become significantly worse."
The average person approaching Citizens Advice for money advice owed £16,971, the organisation said. It would take around of 93 years for people contacting a debt charity for help to repay their borrowings at an affordable rate.
"Low income, combined with irresponsible lending, unreasonable debt collection practices and badly informed financial decisions are at the root of many of our clients' debt problems." David Harker, chief executive of Citizens Advice said " The reality is that they are condemned to a lifetime of poverty overshadowed by an inescapable burden of unpayable debt."