The signs indicate that the housing market activity is finally starting to pick up, with estate agents reporting that buyers have begun returning to the market and sellers are more willing to negotiate on prices, however transaction levels are still reported to be low compared with last year. This represents good news for buyers looking to get a property, however it stands in stark contrast to findings from the Council of Mortgage Lenders (CML) ( ) showing that the number of homes being repossessed has risen for the first time in seven years, from 3,070 six months ago up to 4,640 for the first half of 2005.

The sharp rise in home repossession applications by lenders adds to growing concerns that consumers are struggling with debt. Ed Stansfield of Capital Economics, said, "Today's figures show that for a small but growing minority of borrowers levels of debt have become a problem, despite historically low interest rates.” These figures for repossessions were still, according to the CML, "extremely low" compared with the early 1990s; however adverse credit, arrears and repossessions look set to rise.

Richard Brown, Chief Executive of personal finance comparison site Moneynet ( ) is disappointed to recently see, in light of a possible base rate cut, which would help to ease the burden of mortgage debt within the housing market that, “many lenders are taking this opportunity to increase their margins at the expense of their loyal savers by reducing their fixed savings rates by more than the mortgage rates”.

The personal debt problems of the nation have also not been helped by the punitive charging activities of several of the major lenders.

The Office of Fair Trading (OFT) ( ) has warned eight of the major credit card firms regarding their activities towards customers who miss payment deadlines or exceed credit limits, and ordered them to reduce their “excessive” and "disproportionately high" charges, usually in excess of £20 per transgression, to consumers or face being taken to court.

There are currently 30.6 million people in the UK possessing at least one credit card, with a total of almost £60 billion owed on them.

The credit card firms have defended the need for late payment charges claiming that their use was fair, "Only a very small proportion of customers attract a default charge and as a responsible lender we must have a process in place to manage late payments," a spokeswoman for RBS maintained. Which? have determined that as many as one in four cardholders have been subject to some form of default charge being imposed on them within the past six months. With the number of people accruing charges, the credit firms have admitted they are able to make £400 million a year from default charges alone, and Barclaycard has admitted that 43 per cent of its operating income is generated from these fees.

The OFT have said that the sum being charged by companies is far in excess of the actual costs to the card firms, for late payment. "The levels of the default charges imposed by the credit card companies need to be reduced in order to be fair".

Which? have seen the announcement by the OFT over the credit card penalty charges not being fair, and the threats of court action as, “great news”, but also wants other situations where banks hit customers with unfair charges to also be looked into.

The Chief Executive of Money Advice Scotland, Yvonne Gallacher, said of the prospect of reduced credit card fees: "This would make a big difference to the thousands of low-income credit cardholders who struggle to pay off these fees and charges."

Moneynet is not so optimistic for consumers, and advises for caution following the OFT announcement, warning that credit card companies may be looking to increase their profits via alternative ‘stealth’ charges, “We are concerned that credit card providers may simply attempt to recoup their lost income via higher charges for all…Moneynet recommends credit card customers consider their options before taking out a card -and take into account all charges as well as the headline interest rate”, said Richard Brown.

Some moves seem to be getting made to help those most at risk, but these measures seem to be mainly driven by increased levels of consumer dissatisfaction, and while house prices still look expensive compared with incomes, the worst off may not feel a huge change in their circumstances for some time to come.