The desire to keep up with the Joneses has left 100,000 home owners in Birmingham owing more to the bank than their properties are worth, according to new research.
Traditionally the upwardly mobile have looked to the equity in their homes to fund life's luxurious extras but the cooling of the housing market has seen them turn to expensive loans and credit cards.
Property buyer A Quick Sale claim that the combination of rising interest rates and an increasing laissez-faire attitude to our finances has led to m any people finding themselves trapped in a new form of negative equity.
The research found that one in six people living in Birmingham have taken out a loan to pay for their expensive lifestyles while one in ten said they would take out such a loan even if they had no remaining equity in their property.
According to money education charity Credit Action, UK personal debt had reached #1,237 billion by July 2006. However, just three per cent of those facing financial difficulties claim to have received advice warning them of the dangers of unsecured loans.
Richard Watters, managing director of A Quick Sale, said the lack of good advice was a recurring theme amongst those who found themselves in financial difficulties.
He said: "It's a growing concern that there are so many people falling in to more and more debt, often beyond their control, because they are being ill-advised by financial organisations."
He added: "Our research showed that almost one in ten people who have taken out a loan or credit card were not really planning to but did so after receiving marketing information from a company."
The UK is currently responsible for a third of the unresolved debt in Western Europe with the average household owing #8,577 although when mortgages are included, this figure rises to #50,091.
Many also borrow more money than actually required; one in seven admitted that they requested more in order to provide them with an extra source of disposable cash, thus increasing their debt.