YOUNG PEOPLE CONCERNED ABOUT LIVING COSTS
As Bank of England Governor warns that interest rates could go up again
London 12th June 2007 – Bank of England Governor, Mervyn King, has today (12th June) warned that interest rates may still rise - to 5.75% - to dampen the house price boom. He suggested that families and first-time buyers need to be far more cautious about future financial plans. This warning is reinforced by the findings of a survey* by Equifax, the leading instant online credit information provider, which revealed that 57% of young people are concerned about the impact of the rate on their long term spending plans
Young people and first time buyers are a group particularly affected by the increases, with 46% of 25-30 year olds, who responded to the Equifax survey, concerned about the effect the increases in the rates will have. For some, such as first time buyer Claire Foster, 26, from Surrey, the interest rate rises have seen monthly mortgage payments increase by as much as £100 a month.
Due to the cost of house prices, Claire’s dad had to help her out when she bought her first home three years ago. She was planning to move later in the year but she is concerned about further rises plus larger utility and council tax bills. “The interest rate rises do worry me”, said Claire. “Although repayments are becoming a struggle I am keen not to move further out of London. I am quite careful with money and I have no credit card debts or an overdraft. But with rising living expenses, council tax and motoring costs too many more interest rate rises would put me in dire straits”.
Claire continues: “My father told me horror stories of how he thought he was taking on a huge burden when he took out a £50,000 mortgage in 1988. Luckily his salary rose enough to cover it but at one point the payments went from £270 to £550 a month.
“I didn’t think this could happen again and so bought at the top end of my budget. I was also planning to move to a two bedroom house this year as I feel I have outgrown my one bedroom flat. But if interest rates continue to rise, I may even consider stepping off the property ladder.”
“It is crucial that consumers plan for the future and not just the short term,” confirms Neil Munroe, External Affairs Director, Equifax, “If interest rates rise further in 2007, what may appear to be manageable now may not be in a few months time.
“Unfortunately, Claire’s story is true for many young people hoping to buy their first home, or indeed struggling with mortgage repayments. Our survey revealed that 44% of consumers anticipated that interest rate rises would have an impact on their finances, with 33% claiming day to day living costs would be affected. Therefore, I would advise consumers to gain a true picture of their finances and credit commitments and use this information to help them decide how to plan for the future and reduce monthly outgoings. It’s no good thinking, ‘I can afford this at the moment’. Consumers need to think, ‘will I still be able to afford this if the interest rates go up.”
To get a clear picture of their finances, Equifax recommends that consumers get a copy of their Equifax Credit Report. This can be done instantly online at www.equifax.co.uk
*Survey of 585 Equifax customers August 2006
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Notes to Editors
For interviews with Neil Munroe or further press information please contact Claire Foster, Kate Clements, Elinor Puzey or Wendy Harrison at HSL on 020 8977 9132 or email: claire@harrisonsadler.com
About Equifax
Equifax Inc. is a global leader in information technology that enables and secures global commerce with consumers and businesses. We are one of the largest sources of consumer and commercial data. Utilizing our databases, advanced analytics and proprietary enabling technology, we provide real-time answers for our customers. This innovative ability to transform information into intelligence is valued by customers across a wide range of industries and markets. Headquartered in Atlanta, Georgia, Equifax employs approximately 4,600 people in 13 countries throughout North America, Latin America and Europe. Equifax was founded 107 years ago, and today is a member of Standard & Poor’s (S&P) 500® Index. Our common stock is traded on the New York Stock Exchange under the symbol EFX. .
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