Concerns About Rising Personal Debt In Sweden
Sweden is known for its enviable free market and high standard of living, but the country is currently facing issues surrounding personal debt.
A few weeks ago the Swedish government approved the decision to allow financial regulators to enforce tougher rules surrounding mortgage re-payment from big banks. This is because Swedish house prices have soared by nearly 40% percent in the last five years, but wages have risen at a much slower rate – so thousands of people are using loans to finance their move.
A Recent Dip
Rising house prices in Sweden have strongly influenced the decision for lenders to be stricter with mortgage repayments, but the country has actually seen a small decline in house prices recently. This is both surprising and promising, but critics worry that the new regulations will cause house prices to soar all over again.
Some critics commented on the strength of the Swedish economy, but in reality the Swedish economic growth is weaker than many thought. For this reason the regulations could be very beneficial, as they will make it harder for people to get into large amounts of personal debt.
And the FSA are fairly certain that the new regulations will actually lower house prices, predicting a drop of around 1.5%. This is certainly a positive sign, but the regulations have still caused some concerns as the Swedish crown weakened after the regulation announcement.
Dealing With Personal Debt
One of the main problems with personal debt is that it can affect the economy of a country, but it is also difficult to avoid if other prices are rising (such as house prices). Thankfully there are lots of different ways for people to reduce their personal debt, from signing up to a Debt Management Plan to simply creating a solid budget that can stop them from overspending.
A Debt Management Plan is a fairly informal option that can help to lower monthly repayment rates, making it easier for people to get on top of their personal debt. This is normally worked out by a third party who will provide relevant debt management advice to create a repayment plan that is realistic and fair.
Personal debt is a problem for many countries in the EU, from Greece to Sweden to the UK – but that doesn't mean that the debt isn't manageable. It is entirely possible for individuals to take advantage of resources so that they can reduce their personal debt.