Britain's obsession with home ownership could be hindering the nation’s economic recovery, a leading global watchdog has said. Families in the UK are more indebted than those in many other major developed nations, said the International Monetary Fund – mainly due to borrowing to buy expensive homes. The UK was singled out as having a problem with household debt, along with Portugal – lumping Britain together with a country that was forced to seek emergency funding during the eurozone crisis. Families in the UK are more indebted than those in many other major developed nations, said the International Monetary Fund . The findings, in the IMF’s Global Financial Stability Report, are a stark reminder that the recovery remains fragile. ‘High debt levels in the private sector continue to hinder growth and financial stability,’ the report said. ‘Gross household debt in Portugal and the United Kingdom is projected to remain high compared with that of other advanced economies.’ Soaring house prices have pushed up household debt in Britain in recent years – raising fears that families are over-stretching themselves to get on the property ladder or buy a bigger home. The Bank of England has clamped down on the sort of risky mortgage lending that was rife in the build-up to the financial crisis, in an effort to prevent another housing boom and bust. But the IMF said: ‘Containing financial stability risks from housing and mortgage markets remains important.’ It also said ‘measures to increase housing supply are a priority’ for the UK given the shortage of homes and swelling population. Both the Tories and Labour have promised to step-up house building after the General Election. IMF figures showed household debt in the UK was worth 87.1 per cent of gross domestic product, or total economic output, last year. That compares with 82.6 per cent in Portugal and 76.9 per cent in the United States. Debt levels are far lower in much of Europe, at 72 per cent in Spain, around 55 per cent in Germany and France, and just over 40 per cent in Italy. Douro River, Porto, Portugal: The IMF report lumped Britain together with a country that was forced to seek emergency funding during the eurozone crisis . A separate report will today claim 13million Britons will dive further into debt this year – a 40 per cent rise on 2014. The survey of 2,000 people found that, of the two-thirds of British adults already in debt from credit cards, overdrafts and loans, a quarter will have to borrow even more to cope. Kevin Mountford of MoneySuperMarket.com, which was behind the research, said: ‘It’s important that those relying on credit keep in control of the situation, so their debt doesn’t spiral out of control. ‘Simply working out a realistic monthly budget and cutting out unnecessary expenditure should be the first step.’ THE cost of moving house has soared to £12,000, figures show. Rising estate agents’ fees, removal costs and stamp duty helped push the total bill up 60 per cent between 2004 and last year – double the inflation rate. And it is forecast to hit £15,000 in five years despite recent reforms to curb stamp duty costs. The sky-high price of moving does not include the deposit – £90,000 for the average buyer. Experts said it could be putting families off moving house at a time when demand for properties has already fallen away. A study by the Centre for Economics and Business Research found the bill for moving typically includes more than £5,000 in estate agents’ fees, £3,600 in stamp duty and £1,400 in solicitors’ conveyancing bills. Paula Higgins, of consumer group the HomeOwners’ Alliance, said: ‘This is more bad news for struggling families.’
Borrowing to buy has left UK more indebted than other developed nations . Britain and Portugal - which had to seek emergency funds - singled out . IMF's Global Financial Report a stark reminder that recovery is still fragile . International body says increasing the housing supply must be top priority .