The amounts lent to cash-strapped families in informal loans from their friends and relatives have more than doubled in the last three months to reach a new high, a study has found.
But while some are coping with the double-dip recession by turning to their loved ones, others are turning to crime, with financial information services company Experian reporting a 23% increase in fraudulent mortgage applications.
A study by insurance firm Aviva found that the typical size of loans from friends and relatives to their families had doubled in the past three months to £1,545, compared to £701 in May.
The report suggested the rise was an indication that people are turning to their loved ones to avoid taking on more formal borrowing and the charges that come with it.
It also found that family debt levels crept up from £9,314 on average in May to £10,563, excluding mortgages but including debts such as personal loans, overdrafts and credit cards.
At the same time, average family incomes fell from £2,150 in May to £2,003 by August, suggesting some parents are taking unpaid leave or cutting down on hours to care for children during school holidays, the report said.
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The rise in mortgage fraud attempts, meanwhile, coincides with a period when lenders have been tightening up their borrowing criteria, making it harder for borrowers to take out a mortgage and triggering a drop in the proportion of mortgage approvals.
While there have been signs of increased competition to attract mortgage customers in recent weeks, much of this has been aimed at those with larger deposits.
James Jones, head of consumer affairs at Experian, said: "The increase certainly reflects the fact that many households are increasingly cash-strapped and resorting to ever more desperate measures.
"Nearly a quarter of mortgage fraud is due to people inflating their incomes."
More than a million home owners saw their mortgage rates increase in May, with banks blaming the increased cost of funding a mortgage and concerns were raised that people will find it harder to switch to another deal due to lenders' toughened criteria.
Experian said the majority of attempted mortgage frauds were due to people lying about their own circumstances.
Just under a quarter of them were made by people trying to hide a bad credit history and one in five attempts were due to people giving misleading employment information.
Nick Mothershaw, director of identity and fraud services at Experian, said: "Over the course of the last year, we have seen mortgages continue to be targeted at a high rate, with more people trying to misrepresent their personal, employment and credit information on applications to get properties out of their reach.”