‘Household debt to put UK economy at risk’

Household debt will put UK economic recovery at risk, a leading think-tank has warned.

The Institute for Public Policy Research (IPPR) Criticized British Chancellor George Osborne’s policies on the property market and said the government’s “Help to Buy” scheme had been a failure and could undermine the recent recovery.

The scheme is designed to make it easier for people, who have been unable to buy homes because of large deposits needed to secure mortgages, to get a mortgage.

Based on the plan, the government provides £12 billion in guarantees to lenders to encourage them to give mortgages of up to 95 percent of the value of the properties being bought.

“It is an indictment of the failure of his [Osborne’s] attempts to boost business investment spending that, rather than encouraging a rebalancing of the economy, he now has to resort to policies that will increase its imbalances, “said IPPR’s chief economist Tony Dolphin.

Earlier in November, the Bank of England (BOE) said UK household debt had reached a record level, with borrowing including mortgages hitting £1.43 trillion.

The news about soaring UK personal debt comes as Britons are struggling to cope with rising costs of living at a time of austerity.