Restrictions may be placed on the size of initial mortgages by the Financial Services Authority (FSA), it has been revealed.
The regulations are up for consideration by Lord Turner in his review of banking policies as he believes limiting the size of home loans could have its advantages.
In his review, Lord Turner revealed: "The rapid extension of mortgage credit was a key factor in the origins of the financial crisis in the US, the UK and several other countries."
He added that the FSA’s September paper provides an opportunity for mortgage regulation to be put under the spotlight and to help reshape "future regulatory landscape".
In news which could interest those who need debt management, Lord Turner also announced that the individual bank strategies are proving ineffective, reiterating the need for a wider review.
Earlier this week, the FSA announced a rise in repossessions in the UK, with an increase of two-thirds seen during 2008.
It revealed that 46,750 properties were repossessed last year, up from 27,9000 in the previous 12 months.
Rising unemployment emphasises the need for Payment Protection Insurance (PPI), it is claimed.
Defaqto states that with 165,000 more people becoming unemployed in the last three months, people are worried over what might happen with their mortgage.
"People who borrow money, or those who already have debts, are likely to be interested in purchasing some form of protection insurance in the next few years," comments Brian Brown, head of insight at Defaqto.
He adds that, at the very least, people need to prioritise their assets, as there is "little point taking PPI cover for your credit card bill or a loan if you haven’t first protected your mortgage".
Cancelling PPI insurance on a mortgage is not a sound debt management decision to make, Mr Brown believes, as this could prove disastrous if a person were to lose their job.
A similar conclusion on the unemployment statistics was drawn by Burgesses this week, with its PPI lobbyist Sara-Ann Burgess urging people to take out a policy.
She said that increased redundancies and repossessions further accentuated the need for people to make sound financial planning.
The UK’s unemployment rate has risen to 6.5 per cent, the Office for National Statistics has found, which may lead some people to consider debt management.
In addition to this, the claimant count has also risen, with the growth of average earnings including and excluding bonuses decreasing.
"We expect unemployment to rise to a peak of 3.3 million … around late-2010/early-2011. This would give an unemployment rate of around 10.5 per cent," comments Howard Archer, chief UK economist at IHS Global Insight.
January’s figures show a 0.5 per cent increase on the previous quarter and a 1.3 per cent rise on the same period last year.
The rate of unemployment is now at its highest since 1997, totalling 2.03 million, the ONS reveals, with redundancies in the three months leading up to January standing at 266,000.
A slowdown in the growth of average earnings was also noted by the ONS, which believes the level of growth was at 1.8 per cent over the quarter.
Prior to yesterday’s announcement, experts had predicted the unemployment rate would exceed two million.
The number of homes repossessed increased by 68 per cent last year, highlighting the need for debt management advice, it has been revealed.
New statistics from the Financial Services Authority (FSA) show 46,750 properties were repossessed during the course of 2008, with 68,000 people in arrears in the final quarter alone.
The figures mark a stark increase on those from 2007, when 27,900 properties were repossessed.
Paul Broadhead, head of mortgage policy at the Building Societies Association, says that "every repossession represents an individual tragedy", emphasising the need for advice to be sought before it is too late.
Additional statistics from the FSA show the number of mortgages in arrears at the end of 2008 was 31 per cent higher than it was a year earlier.
These figures demonstrate a worse situation than those released by the Council of Mortgage Lenders in recent weeks, which suggested there were 40,000 repossessions during the year.
Furthermore, it revealed that one in 64 mortgages were in arrears of 2.5 per cent or more throughout the course of last year.
Unemployment levels in the UK are set to meet the two million mark, experts predict.
Official statistics are to be released later today, with industry commentators suggesting they may breach the "politically sensitive" figure of two million.
City economists already predict that 84,800 people joined the dole queue last month, with 73,800 already taking jobless benefits in January.
"Sharply rising unemployment, along with slowing income growth, seems highly likely to increasingly depress consumer spending," Howard Archer, chief UK economist at Global Insight, tells the Daily Telegraph.
The amount of people in search of employment, which includes those who are not eligible for benefit, reached nearly 1.98 million when statistics from the fourth quarter of last year were released.
Last month, the Office for National Statistics announced the unemployment rate stood at 6.3 per cent in the three months leading up to December 2008.
It also found that the claimant count stood at 1.23 million in January 2009, which emphasises the need for people to manage their debts effectively.
The number of claimants was at its highest since July 1999, according to the statistics.
The government has unveiled new measures to prevent credit card companies from increasing limits without consumers’ knowledge.
It hopes this will put an end to irresponsible lending, as many people find themselves at the mercy of credit card companies throughout Britain.
Proposed by the department of Business Enterprise and Regulatory Reform, it is intended that the measures will help those who forget how much they are made to pay back in high interest payments.
"We are not convinced that legislation is the best way forward and will end up disadvantaging some of the customers it is intended to help but we, like the government, want to ensure that vulnerable consumers are protected," commented Apacs, the UK payments association.
It adds that the credit card industry is committed to managing its customers’ debts effectively, although those who are in difficulty can also seek advice from a debt management company.
Earlier this month, Apacs announced that £1 billion is processed every day through its faster payments service, which equates to five million payments.
It was launched in May last year and allows customers to make and receive immediate payments.
Falling mortgage rates will see savings "hammered" if they continue on a downward slope, claims one expert.
There is a possibility that mortgage rates have now fallen as low as they will, says a spokesman for Moneyfacts, with few lenders likely to slash rates further.
"Effectively the banks and building societies can’t afford to lend money at lower than they are doing at the moment," he comments.
Furthermore, the expert believes standard variable rate mortgages at less than five per cent are "reasonable", despite not being as low as some people would like.
Things are unlikely to improve any further for borrowers, the spokesman believes, mainly because interest rates cannot drop much lower. Instead, the focus will have to shift towards helping savers.
On March 5th 2009, the Bank of England cut the base rate by half a percentage point to 0.5 per cent. This is the lowest rate since the formation of the Bank of England in 1694.
Moneyfacts reported in March 2009 that only 12.1 per cent of lenders (11 out of 91) intended to pass on the latest interest rate cut to borrowers.
Falling mortgage rates will see savings "hammered" if they continue on a downward slope, claims one expert.
There is a possibility that mortgage rates have now fallen as low as they will, says a spokesman for Moneyfacts, with few lenders likely to slash rates further.
"Effectively the banks and building societies can’t afford to lend money at lower than they are doing at the moment," he comments.
Furthermore, the expert believes standard variable rate mortgages at less than five per cent are "reasonable", despite perhaps not being as low as some people would like.
He claims the spotlight is now on "the savings side", which means accounts which are not as reasonable are going to be exposed.
On March 5th 2009, the Bank of England cut the base rate by half a percentage point to 0.5 per cent. This is the lowest rate since the formation of the Bank of England in 1694.
Moneyfacts reported in March 2009 that only 12.1 per cent of lenders (11 out of 91) intended to pass on the latest interest rate cut to borrowers.
Retirees may soon be finding they need debt management advice, as new figures show the value of assets in defined contribution pension schemes is decreasing.
According to Aon Consulting, they saw a ten per cent dive last month, which is attributed to falls in the stock market.
"Their first port of call however should be paying down debt, though even in doing this they will free up more of their monthly budget and need to consider what to do with it," Laith Khalaf, a pensions analyst at Hargreaves Lansdown, tells the Daily Telegraph.
Furthermore, the expert believes the government will expect people to go out and spend their interest savings.
The figures also suggest the funds have lost a third of their value since September 2007, amounting to £182 billion.
According to the latest statistics released by NS&I, 47 per cent of the population manage to save regularly, remaining consistent for the third quarter.
Longer term, the monthly amount Britons are setting aside as a percentage of income has fallen every autumn since 2005, it also found.
The average wealth of Britain’s households dropped by 17 per cent last year, which could highlight the need for debt management, a new report finds.
Findings from Citigroup show this is the biggest drop for 40 years, fuelled by falling house prices and problems in the stock market.
"Although the Bank of England used to be somewhat sniffy about these ‘wealth effects’ on spending, it is clear that we are seeing an impact," comments Michael Saunders, chief UK economist at Citigroup.
He adds that the estimated 40-year low may, in fact, be greater than the experts predicted.
A weakness in consumer spending has also enhanced the problem of personal debt, the expert believes, with the statistics showing a drop of £45,000 in wealth per household.
The figures follow similar findings released in the US last week, which showed the average household became poorer by an average of 18 per cent in 2008.
According to statistics published by CreditAction on March 2nd, total UK personal debt at the end of January 2009 stood at £1,457 billion.
This has slowed further by 0.6 per cent to 2.8 per cent in the last 12 months, it also found.
