Personal debt levels `still too high`

By Joel Stanier – Financial specialist

The IMF (International Monetary Fund) has `expressed concern` about personal debt levels in Britain.

The comment came as the IMF`s six-monthly World Economic Outlook warned that property prices in the UK were still too high: something it called `worrisome`.

As the Guardian reports, the IMF reminded us that we could be in for a double dip in house prices as they were `overvalued and vulnerable to a fall`. After all, demand for housing and house prices have both fallen since various incentives came to an end - in the US as well as the UK.

In addition, the IMF `expressed concern that debt levels in Britain were still high, despite efforts by individuals to reduce their borrowing levels`.

"Household debt ceased to grow during 2009 in the US and the UK," the IMF stated. "While this has brought about a noticeable decline in ratios of debt-to-income and debt-to-financial assets, these ratios remain well above the levels of a decade ago."

The latest figures from the Bank of England show that people in the UK are currently carrying £1.457tn of debt. The majority of that debt - £1.24tn of it - is secured debt (e.g. mortgages), while the remaining £216bn is unsecured debt such as credit card debts, overdrafts and unsecured loans.

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Tags: debt, personal debt, IMF, International Monetary Fund, World Economic Outlook

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