This survey by Shelter should send out a very sobering message to the government, to the banks that rely on the repayment of debt and to those that still rely on the housing market for a living.
An exclusive survey conducted by YouGov in Aug 2010 for the homelessness charity Shelter 'reveals how people constantly struggling with their housing costs in the East Midlands are being forced to take drastic measures with credit cards in order to keep a roof over their head'.
2234 people in Great Britain were asked if they had borrowed against their credit cards to pay their mortgage in the previous 12 months. Worryingly 5.6% said they had, which is an increase of about 47% on 2009's figure of 3.8% where 2,022 adults had been questioned.
Of the 161 people within the survey who were from the East Midlands asked about this, 2010 saw a rise to 6% from 2009's figure of just 1%!
When these figures are adjusted by region and nationally you end up with 202,000 people paying their mortgage by credit card in the last 12 months in the East Midlands alone. Extended nationally this equates to over two million.
The chief executive of Shelter, Campbell Robb said “This is a totally unsustainable situation and one which we fear could see many more families pushed into the spiral of debt, eviction or repossession and ultimately homelessness. Using credit cards to pay the rent or mortgage is simply robbing Peter to pay Paul."
Also, with the differential in interest rates between mortgages and credit cards doing this makes paying the mortgage astronomically expensive.
Mr Robb went on to say “Already someone faces the nightmare of losing their home every two minutes, and we would urge every single one of these people now relying on credit to keep their home to seek advice urgently.”
Many people also do not realise that, although an ordinary loan or credit card is technically unsecured lenders can, in the end, use the courts to force people to sell up to repay the loan. Or they can get a charging order placed on the property so that when it is sold they get their cut of the equity first.
This is also without the public sector cuts having started in earnest across the nation. And with VAT just having risen we may well see even these depressing figures increase as the year goes on. This can also only place further downward pressure on house prices.
Shelter provides advice on dealing with homelessness and debt HERE. Or phone 0808 800 4444.