In 2008 the number of agreed mortgages slumped to its lowest level in 34 years according to the Council of Mortgage Lenders (CML).

Just 516,000 mortgages were lent to borrowers in 2008, down by almost 50% on the previous year. This is the lowest figure since the CML started recording levels in 1974.

First-time buyers found they had to stump-up an average deposit of 22% of the property’s value to secure any funds from lenders.

With widespread money troubles – stemming from consumer credit debts (store cards, credit cards, overdrafts and personal loans) and rising unemployment – further pressurising household finances, the CML predict these figures could be even worse this year.

Financial advice agencies have reported that they have seen an increase in the levels of enquiries for their free debt advice. These organisations have suggested that because of the lack of activity from lenders in loaning money, people are having to resort to more expensive means of credit if they have it available.

For those people who have hit their credit limits on overdrafts, store cards and credit cards etc, the option to take out a consolidation loan is often no longer available.

Debt help organisations recommend seeking free debt advice from a reputable and impartial company.

They will be able to recommend alternative debt help solutions that can relieve the pressure on household finances whilst still repaying credit debts.

Following their free debt advice they may suggest an IVA (Individual Voluntary Arrangement) or a debt management plan (DMP) to gather balances together into one affordable payment.

An IVA is a useful solution for people with debts over £15,000, which is drawn up by a qualified insolvency practitioner.

Once an IVA is agreed, all interest and charges stop accruing. An IVA is usually for a set period (typically 5 years), after which time all unsecured balances are written off.

Debt management plans are an informal solution which are often suggested for balances of under £15,000. Unlike an IVA, debt management doesn’t require the services of an insolvency practitioner.

For help and further information on all solutions, it’s recommended to seek free debt advice from a reputable company. Established and well-regarded companies, who offer IVA advice, include The Debt People, Hamilton Locke and Chiltern Debt Management. Their solutions are tailored to the individual.