Reading is a boom or bust town

The high cost of living in Reading has made it a victim of its own success.

First-time buyers saving up for a property are finding they cannot keep up with soaring house prices, and rising interest rates have led to a record number of house repossessions and insolvencies.

Research by the Reading Lib Dems shows house prices have almost trebled in 10 years, from an average £81,377 in 1997 to £198,851 - five times the average borrowers' income.

And repossession orders issued in Reading borough have increased by 19% since 2005 to 528, with individual insolvencies rocketing 14% to 735.

Dave Wild, a DJ who also who works at the Knob Shop in London Street, has been saving up to put a deposit on a house for more than two years.

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But to do this the 25-year-old has had to live at home with his parents in Kerris Way, Earley, and he admits the situation is becoming "desper-ate".

He said: "The worst part is the stigma attached to it. I'm 25, have my own business but I still live with my mum and dad.

"While it's not the ideal situation, it's the best of a few bad options. It's better than getting rid of £500 every month on rent.

"For something we aren't getting any money back for it seems very expensive. I'm not prepared to give up my social life to pay a mortgage."

Shelter chief executive Adam Sampson said: "The real tragedy is that the chronic lack of social rented housing means the safety net for those in the greatest need, who can't afford to buy or even rent at today's prices, is completely inadequate."

Reading's Citizens Advice Bureau has noticed a huge rise in the number of people passing through its doors unable to pay their debts - averaging about £13,500 per person.

It deals with 60 home repossession cases each year, but the number of cases which don't involve the CAB is thought to run into the hundreds.

And centre manager Christine Moore believes the major factor is the high cost of living in the town.

She said: "It's one of those places where quite a high proportion of people are on decent salaries, but there are also a high proportion of people, particularly families, who are struggling.

"For a long time people have remortgaged and consolidated, but with rising interest rates they realise they can't keep payments up."

But the reasons for insolvency vary wildly, according to a report by the Insolvency Service.

In the study, 49% said their bankruptcy was down to credit misuse, 16% cited business failure and the remaining 35% attributed it to other causes, like illness, relationship breakdowns and redundancy.

Service inspector general and chief executive Desmond Flynn said: "The report concludes that very few people see bankruptcy as an easy way out of their debts but rather that they have no real alternative."

And although the Council of Mortgage Lenders says the number of repossessions is still quite low, rising interest rates in recent years have been enough to plunge some borrowers into trouble.

Spokesman Christopher Dean said: "Starting in 2003 there were a number of interest rate rises which, for people who are already slightly over-stretched, can put them over the edge."