Is debt a bad thing. Discuss the impact of debt on the housing market Essay

Is debt a bad thing. Discuss the impact of debt on the housing market in the UK, with reference to; (a) Levels of pesonal debt (b) Rent Arrears (c) Housing Association - Essay Example The loan seeker might be badly in need of the money and will accept all the conditions of the lender. Western people generally and the UK people in particular have a have a habit of spending all the money they earned and they don’t bother much about the need of saving for the future. Whenever they are in need of a bulk amount for purchasing a home or car they will approach the banks or other financial institutions for loan. These financial institutions are ready to help everybody irrespective of their financial capabilities before the current global economic problems started. But at present most of the financial institutions have tightened the screws by enforcing strict rules and regulations for granting loans for individuals. Housing market is one of the most important sectors as far as the loan exercise is concerned. Some of the statistics available for the UK housing market in 2009 is given below. There were 6,200 first-time buyer loans for properties between the old threshold of  £125,000 and the temporary threshold of  £175,000, representing 32% of the 19,700 loans to first-time buyers in September. In addition, 7,800 first-time buyers (40%) bought properties valued below the  £125,000 original threshold. There were 7,300 home mover loans for properties between  £125,000 and  £175,000 which was 24% of the 31,000 loans to home movers in September (One third of first-time buyers make lucky stamp duty escape, 2009) It is evident from the table that the borrowing habits in the housing market go on increasing. Because of the current recession, the criteria for lending have been tightened by many financial institutions and even then the borrowing habits were not affected. House prices are skyrocketing year after year and the earnings of the ordinary people are not enough to meet even for their daily expenses. The current global financial crisis has come