Consumers doubt credit crisis

Over half of the public still believe obtaining a mortgage is a good investment, despite the current economic climate.

According to new research by the life insurer Zurich, 52 per cent of consumers would consider financing a mortgage – in spite of the housing market downturn, the difficulties in obtaining credit and the rising cost of living.

A further fifth of the people surveyed refused to believe that the credit crunch even existed, claiming that it is a term created by the media.

Tony Solomon, business development director of Zurich UK Life, insisted that it is a reality. "With the credit crunch bringing spiralling living costs, from fuel to food to interest rates, families are seeing their budgets stretched to the limit," he said.

"It is crucial for people to do something positive such as seeking advice and reviewing their finances."

This survey comes as the consumer price index hits an eleven year high of 3.3 per cent and Mervyn King, the head of the Bank of England, warned that inflation could reach four per cent before the end of the year.