We find ourselves in the midst of a global credit crunch, and as banks across the UK are affected, millions of families are struggling to pay off their mortgages in the New Year.

With the average property value standing at £200,000 - first-time buyers now find they have to borrow much larger amounts to get their foot on the bottom rung of the property ladder. However those who rent property are also feeling the effects of the credit crunch, with 28% of renters saying they've had difficulties paying debts ‘at least occasionally'

According to a recent Bank of England survey, a decade long borrowing binge has helped push personal debt over the £1.3 trillion mark. As a result, close to one-in-ten of mortgage holders in the UK admit to struggling to pay off their loans - with an additional 15% saying they have struggled with debts ‘at least occasionally'.

Interest rates have soared in recent times, and the recent BoE survey showed mortgage payments have risen by a total of £3.6 billion as a result. And with the global credit crunch predicted to worsen, banks find themselves under pressure to tighten money supplies even further in order to balance the books.

More of us are now having to borrow more or extend our mortgages as well as having to work overtime or take on second jobs in order to keep up with payments.

The survey also revealed that as house prices have tripled since the beginning of the 1990's, more families now have to take on far bigger debts in order to buy property. Around 15% of homeowners now owe more than £150,000 - as compared to in 1991, when fewer than 5% owed such an amount.

The BoE survey also revealed that the massive house-price gains of recent times could help cushion many families in the future, and that the proportion of people having difficulties servicing their debts was lower than during the recession in the early 1990's - which saw interest rates soar to over 15% resulting in a plunge in house prices.

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