Borrowing conditions for many consumers already struggling with money could deteriorate further in the year ahead, according to one industry commentator.

Finance advisory firm Fool.co.uk has commented upon recent assertions from Kate Barker of the Bank of England’s monetary policy committee. She has stated that those at the lower end of the mortgage market but currently on fixed-rate deals might be forced on to higher interest standard variable rate deals when their current product expires. This in turn could have a knock-on effect on other demands on their finances, such as credit cards, loans and utility bills.

Meanwhile, property prices across the UK are predicted to enter a period of decline as the year proceeds, further impacting upon the financial future of many who have invested in homes. David Kuo, head of personal finance at Fool, remarks: “The twin threat of falling house prices and rising mortgage repayments is a frightening proposition that could shatter the dreams of many recent buyers. For some people, being forced onto a lender’s standard variable rate is a possibility if other forms of financing are unavailable. However, homeowners who believe they may be in this position should take action now.” He suggested that borrowers should speak to their lenders to determine their policies in terms of negotiating over current mortgage deals in order to avoid getting into an untenable financial situation.

Meanwhile, those consumers who are increasingly aware of debts accruing in terms of credit cards, loans and other payment pressures might like to seek out advice regarding cheap consolidation loans. Such loans can be helpful in combining confusing outgoings into one monthly payment and could help borrowers to pay off their debts more quickly.

In terms of mortgage borrowing, Mr Kuo suggested that establishing the loan-to-value ratio of the lent sum can be instrumental in securing a good deal. Calculating this sum can gives borrowers a clear idea of how much they need to overpay their mortgage to bring it down, therefore putting them in a more competitive position when negotiating a new mortgage product.

Overpaying a mortgage is undoubtedly a wise financial move – but can cause further financial strain on a household. However, a debt consolidation loan can reduce the monthly amount being paid out on other debts and could potentially free up more capital to invest in the property investment itself.

UK consolidation loans are not only of use to those without outstanding mortgage payments to make, however – according to recent reports, many sectors of the community are currently finding it difficult to juggle the many demands on their finances and could therefore benefit from such financial solutions. Recently a survey of 3,000 people aged between 20 and 29 found that the average sum owed stands at in excess of 6,000 pounds. Conducted by Halifax Financial Services, the research can be seen as further evidence of the growing need for many people to address their debt situations – using debt consolidation if necessary.

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