25th September 09: PPR - Financial collapse less than three months away for 7 out of 10 households
Homeowners are treading a precarious financial path and are failing to protect themselves against losing their home, with seven in ten only able to survive for up to three months should they be made redundant, according to new research from Property Portfolio Rescue (PPR).
The research reveals that almost three quarters of homeowners are not worried about losing their home if they are made redundant. However, only 27% of people have any financial plan or insurance in place and a worrying 69% believe they could only survive financially for a maximum of three months without a job. A further 15% claim to be able to survive for less than six months should they fail to find new work straight away.
Younger homeowners would be the worst affected, with 79% of 25-30 year olds only able to keep afloat financially for less than three months should they lose their jobs, compared to 62% of 46-50 year olds.
Over a quarter (29%) of home owning couples admitted they would be unable to cover the mortgage and household bills at all should one of them be made redundant. While 63% do have access to some form of savings and 43% to support from a partner. The survey highlights the worrying reality that seven out of ten households have insufficient financial reserves to survive anything other than very short term unemployment.
Nick Hopkinson, Director of Property Portfolio Rescue (PPR), comments: “It’s shocking to think that, in spite of the majority of homeowners questioned only being able to pay the bills for a matter of months without their current job, the idea that they might lose their home as a result of unemployment does not seem to have occurred to most people.
“With unemployment already at the highest levels since the 1980’s currently and surging to over 3.0million in the next few months; losing your home after a relatively short period of financial hardship is a very real risk. Homeowners should be taking action now - going through their finances with a fine tooth comb, reducing debts wherever possible, working out where they can afford to make sacrifices if need be and putting some form of insurance or savings plan in place - to avoid long term and serious financial disaster.”
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