» Click here for the original article

The Financial Services Authority has decided it is time to broadcast TV ads to calm mortgage holders growing fears of the credit crunch.

The financial watchdog has revealed that one in five mortgage holders are concerned about meeting their repayments in the next 12 months.  When asked how they would meet these costs, a quarter of them said they had no plans.

This comes as credit charity credit CreditAction revealed that the total UK personal debt at the end of January 2008 stood at £1,412 billion.

As debts and fears escalate, the FSA is now launching a £2 million advertising campaign to help consumers make informed financial decisions and find the right mortgage for them.  It is especially focusing on people whose fixed rate or discount deals are coming to an end this year  – 1.4 million short-term fixed rate mortgages are due to end in 2008.

And the picture continues to get bleaker for indebted Brits – CreditAction says total debt has increased by £113 billion in 12 months. The total secured lending on homes at the end of January 2008 stood at £1,187 billion.

According to its latest statistics, the average household debt in the UK is £56,708, including mortgages – this means the average owed by every UK adult is £29,747.

Average outstanding mortgage for the 11.8m households who currently have mortgages now stands at £100,485. Two fifths of mortgagors have secured debts of over £90,000, up from one fifth in 2004.
Britain's interest repayments have soared to £93.9bn in the last 12 months and the average interest paid by each household on their total debt is approximately £3,775 each year.

CreditAction has also published some worrying daily debt statistics for UK homeowners. According to the charity, Britain's personal debt is increasing by £1 million every five minutes and consumers will borrow an additional £310m today alone.

Other CreditAction daily statistics reveal the average household debt will increase by over £12.45 and 74 properties will be repossessed today. Bank and building societies will hand out £1 billion in mortgages and 4,000 fixed rate mortgages will also come to an end today. More worryingly, 388 mortgage possession claims will be issued today and 272 mortgage possession orders will be made also.

Chris Pond, director of Financial Capability, says: “Economic conditions are getting tougher, putting pressure on family finances. As the UK's financial watchdog we can help. We have created a new checklist sets out simple steps that homeowners can take to manage their money and mortgage in difficult times.”

The FSA has released the following tips to all UK homeowners. The watchdog says: “Check your budget – think about how you would cope if your mortgage payments increased significantly.

“Start planning now – talk to your lender and check out your options with your adviser and comparison tables.

“Get help – don't panic if you're falling behind with your payments, talk to your lender, your adviser and get free, confidential help from an independent debt advice agency.”

If you enjoyed reading this article and would like to stay informed with what’s happening in the property and property finance market please visit The Mortgage Broker Blog daily and subscribe to our RSS feed.