IVA applications look set to increase as house prices fall

According to the accountancy company Grant Thornton, an increasing number of middle-class families are being caught in a debt trap as a result of house prices continuing to fall.

The decline in property prices overall in the UK has resulted in many people no longer being able to raise additional funds via remortgages as a way to pay off outstanding debts such as personal loans and credit card payments.

This has forced a number of middle-class families into financial difficulties as they struggle to meet their repayments.

The decreasing amount of available job prospects combined with a number of redundancies as a result of the currrent economic trend is also a large factor to this current dent accumulation.

The proportion of homeowners being forced to declare insolvency has doubled since 2007 and is set to rise further.

Homeowners accounted for 70% of applications for IVAs received by Grant Thornton in 2008’s second half, up from 58% in its first half and 35% in 2007’s first half.