Despite the UK’s economic downturn, the desire to have a high-powered or good looking car is driving thousands of British consumers into debt, it has been revealed.

A report from information services firm Experian has shown that car purchases are the number one motivation for Britons to take on a loan and spend beyond their means.

Close to one in five men are willing to give themselves a debt management headache in order to buy the car they want and the same is true of almost ten per cent of women around the country.

The reason for this willingness to risk debt problems is attributed in part to the fact that a third of all British adults confess that they are influenced by how other people perceive them.

Kirk Fletcher, from Experian, said: "The credit crunch is having a significant impact on consumer confidence across the UK, yet this survey highlights the fact that the consumer’s desire for a car that projects the right image remains as strong as ever."

Last week, swiftcover reminded drivers that they can help themselves avoid money problems by accelerating and braking less often in their cars in order to conserve fuel.

The average house price in the UK plunged by close to 2.5 per cent over the course of May, according to the latest figures compiled by Nationwide.

Millions of homeowners are experiencing serious debt management and money problems and the average property price has fallen by 4.4 per cent in the past 12 months.

First-time buyers and people looking to remortgage are finding it increasingly difficult to secure a good deal and the reduction of house prices has begun to accelerate, Nationwide reports.

Average house prices fell by £5,000 over the course of May, which represents the sharpest one month decline since the building society started recording relevant data 17 years ago.

"The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market," said Nationwide’s chief economist Fionnula Earley.

Meanwhile, the Axa insurance firm warned that the money problems facing British homeowners could soon be worse than those experienced during the last property crisis in the early 1990s.

There will be no reduction in the base rate of interest until August at the earliest, according to one expert.

Howard Archer, chief UK and European economist at Global Insight, is convinced that the inflationary pressures within the British economy will be enough to force the Bank of England to maintain the base rate for the next few months.

A cut in interest rates would be welcome for the millions of Britons experiencing debt problems but Mr Archer predicts that such a move will not be made soon.

However, the economic expert expects to see the base rate begin to move significantly as the year goes on and predicts that it will fall as low as four per cent at some point next year.

"It currently seems highly unlikely that the bank will be prepared to trim interest rates again until August at the very earliest," he said.

According to Credit Action, British borrowers pay out an average of around £3,765 each month to service the interest on their debt management burdens.

A report from Egg has highlighted the extent of the financial squeeze currently being put on consumers and households around the UK.

Millions of Britons are suffering with money problems and the average individual needs around £1,077 in order to pay their household bills, buy food and meet their debt management demands on a monthly basis.

In addition, the financial services firm’s research found that around half of the UK’s workforce would not be able to support their families for more than four months if they became unemployed.

"As a rule of thumb, it has long been considered sensible for families to have cash savings of at least three months income, for any of life’s emergencies," said Tobias van der Meer, head of consumer banking and investments at Egg.

"However, our research highlights that far from being a precaution, these savings are a necessity."

Alliance & Leicester reported this week that the rising cost living in the UK has prompted thousands of borrowers to consolidate their debts in recent months.

The mortgage market in the UK is becoming a lottery for people looking to secure a good deal on a home loan, it has been claimed.

According to Moneyfacts, mortgage deals are now typically available for only 11 days, which the company suggests leaves borrowers having to make borrowing decisions quickly and hope for the best.

The personal finance information firm also reports that the number of options available to British consumers has fallen dramatically over the past 12 months.

And this is viewed as particularly bad news for homeowners looking to avoid debt management disaster when they come to the end of their current fixed-rate mortgage arrangement.

"Until the current market readjustment is complete, the ability to time the mortgage market has become more of a lottery than an art, with the majority of today’s better deals expected to have disappeared by this time next week," a statement from Moneyfacts read.

The Council of Mortgage Lenders predicts that around 45,000 properties in the UK will be repossessed as a result of debt problems over the course of this year.

Millions of British homeowners are facing serious money problems as the economy slows and they are left unable to meet their mortgage repayment demands, according to recent research.

A study by the insurance firm Axa has suggested that there are more families vulnerable to having their home repossessed than was the case during the most recent housing crisis in the early 1990s.

Lending practices during the past 15 years have seen millions of Britons borrowing four or more times their own income levels and for many this will result in unmanageable debt problems if the country’s economic issues worsen.

Reflecting on the research, Axa’s director of protection marketing Iain Mallon said: "The economic growth experienced in the UK in the past 15 years has encouraged a short-term view of finances with a buy today and pay tomorrow attitude."

Last week, the mental health charity Mind insisted that lenders in the UK should take a more responsible approach when dealing with individuals who have serious debt management and money problems.

Millions of British consumers are making financial cut backs in response to the rising cost of living, it has been revealed.

Research carried out by Alliance & Leicester has found that a majority of people around the country are taking steps to ease their money problems and to protect themselves during the ongoing economic downturn.

Among the most popular courses of action for those looking to improve their financial position has been to find a new credit card provider and a more competitive borrowing deal.

In addition, around seven per cent of the consumers polled said they have consolidated their credit card arrears through a personal loan in an effort to resolve their debt management problems.

"Taking advantage of the best financial deals on the market is always important, but more so in the current environment," said Emma Walkley from Alliance & Leicester.

Meanwhile, a report from MoneyExpert.com recently revealed that fewer people in the UK have been switching their financial service providers in recent months than was the case last year.

The net amount of money lent to British consumers via credit cards issued by high street banks fell during April, according to the latest figures.

Data released by the British Bankers’ Association (BBA) suggests that people with credit card debt problems are aiming to clear their arrears, with more money being paid back than was borrowed over the course of last month.

However, the annual growth on a seasonally adjusted basis for credit card lending stands at just under five per cent and the BBA’s members are owed around £31.5 billion by their credit card customers.

When it comes to mortgage lending, new loans are being issued at a considerably slower pace than was the case a year ago, which is attributed in part to the existing debt management problems and financial pressures on British households.

Last week, IFAOnline cited LeadPoint research in a report claiming that more and more UK consumers are missing their mortgage repayment deadlines due to increasingly serious money problems.

The rate at which British consumers are complaining about their financial service providers has risen sharply in recent months.

Figures from the Financial Ombudsman Service (FOS) have shown that the number of complaints it received from dissatisfied consumers increased by some 27 per cent during the past 12 months.

With millions of people suffering with serious money problems and debt management issues, close to 800,000 inquiries and complaints were made to the FOS over the past year.

Among the major areas of concern for consumers was the perceived unfairness of unauthorised overdraft charges, the FOS explained.

"In the first quarter alone of the 2007/08 financial year, we received some 20,000 new complaints about these charges," remarked Sir Christopher Kelly, chairman of the FOS.

The High Court recently ruled that the Financial Services Authority should have the power to assess the fairness of unauthorised overdraft charges in the UK, in a decision the British banks are now appealing to have overturned.

Grandparents around the country are digging deep into their pockets to help younger generations deal with their money problems, according to a recent study.

Figures compiled on behalf of the KidStart savings scheme have shown that almost two-thirds of British grandparents regularly use their own cash to offer financial assistance to their children’s sons or daughters.

Millions of young consumers are struggling with debt management and money problems and the latest data suggests that their parents and grandparents are increasingly being asked to help out.

In addition, one in five of the grandparents polled said they had offered financial assistance as younger members of their family raised the cash to buy a car, while one in ten contributed to their housing deposit.

Last week, a report from Birmingham Midshires suggested that the number of people saving money regularly in the UK has risen in recent months despite increases in the cost of living.