Homeowners on low and middle incomes could be sitting on a debt timebomb if the economy worsens, a charity warned yesterday.

The Consumer Credit Counselling Service (CCCS) said the low cost of borrowing, low unemployment and rising house prices had encouraged borrowers to take on more debt.

But it warned that, if there was a downturn in the economy as a result of the current uncertainty and a rise in unemployment, many people could find themselves unable to meet repayments.

Research carried out by the group found homeowners tended to have higher levels of debt than those who rented housing, owing an average of £22,928 excluding their mortgage, compared with £13,432 for those who rented.

Tuesday March 18 2003