How does the credit crunch affects the average person?

ali82

Thanks guys I didn’t really get it but you have made it a bit clearer for me.

I have notice it in some area’s like food, chicken for example use to be 2 packs for £5 sometimes at Tesco now they are £5 for 1, but if I can’t afford that then I will just leave chicken out for that week. I don’t drive I take the tube everywhere or walk and the prices are the same (they usually rise in January), energy yes I have noticed a difference here.

CC etc.. I have not seen any increases in my interest rates? My loan is fixed at 6% and I continue to make my payment each month.

Mortgage interest/ rent yes again a slight rise (shared ownership). I did not mean the average person is mortgage free I meant generally renters btw.

I can definitely see how it would be more difficult for families; having to look after 3 or more people, and for people who are dependant on their cars, and definitely interest rates, but I don’t think it is necessarily the same for everyone.

luckymum_3

i agree.. my money is tighter and tighter by the week.
just last week i saw cooking oil that was £3.25 for 2 litres... this was printed on the label ,not by the shop ..
at the moment if its a choice of my kids eating and getting further in to trouble with repayments ,well the kids come first..debts will come last

siross2203

i think one of the largest problems is the media, there is an incredible amount of scare-mongering going on. this is being compared to the late 20's early 30's great depression, there is talk of a european recession coming.

this is simply not true, the main focuses with todays job losses in housebuilding (not all of construction) is cyclical. it will happen and then in time, it will be the boom sector to be in.

I work in construction recruitment at senior level and the rest of the market sectors are not suffering as badly as housebuilding. Retails sales for May across the uk were up 3% on the month before showing that people arent scared of what is happening.

what you will find is that things are blown way out of proportion and really, things arent as bad as originally or currently thought.

I am 20, i live with my gf who is 21, between us we earn 43k a year gross. we have a beautiful appartment that we rent because we are holding out to buy, and dont have a great amount of money left over due to paying off debt, however by simply being a little more careful we avoid any spiralling costs. our food shopping is literally no different to 6 months ago, yes my car costs me more but i am lucky enough to walk to work as does my gf.

I think people need to stop worrying, stop looking at 1100 jobs gone in housebuilding and thinking we are all going to keel over and die. put it this way:

housebuilders are struggling for cash and cant sell homes, so lay off lots of people...

homes stop getting built apart from social housing quotas which are paid for by the government and have no risk attached...

people still want to buy new homes but will struggle as they arent being built...

in 6 months time, i will want to buy a home but if none are being built then supply is not meeting my demand (along with millions of others)...

we all know what this means, you homeowners who have had about 9 months of higher mortgages or tighter fuel bills and maybe even negative equity will now be sitting on an asset that will meet the value of last year.

this will be sustained by the fact it takes so long to build to meet those demands, so house prices will go back up to where they were, then give it a while and it will all happen again.


I know this is one guys opinion but I think the media have a duty of care not to just present doom and gloom to the nation, granted its not a great situation but it is not as bad as it is made out to be.

hope somebody agrees with me!

ali82

sirross this is exactly what I mean, I think al lot of it is just hype, the media panicking us, yeah prices go up but they come down too, what you spend extra on bread you can same on milk!

I really don’t mean to patronise anyone!! I just think it has been blown way out of proportion

ali82

I work in a similar field to you

SingleSue

What I can buy now with my static income bears absolutely no relation what my money could buy me a year ago.

How far my fuel goes now for the same budgetting a year ago, goes no-where near as far as it did a year ago.

I realised just how much things had gone up by when I was buying a meat for a family roast and burst into tears in the middle of the shop..... I could only afford to get a frozen chicken and not the beef/lamb/pork of a year ago. We now leave out so many things from our shopping list which a year ago were thought of as essentials.

And this is a family with no debt to meet, to credit cards to pay but no way of increasing our money coming in each week.

Times are def getting tougher......and I don't read the papers, I just pay the bills and budget the money!

Mind you, back in the last recession when bills were spiralling and the cost of fuel was going mental, I couldn't see the problem...my income was too good and the chance of earning more via overtime was possible.

mountainofdebt

Personally I can see 2nd jobs becoming the norm rather than just for those who are in debt.

I've started working in the evenings, primarily to get out of debt, but can see me staying on even when we're out of it so have some sort of lifestyle.

Its also very interesting how many people have 2nd jobs these days.

LilacPixie

Siross I agree with you to the extent that the media is making us all much more aware of the current situation, something previous generations did not have the benefit of.

Quite simply food costs have increased substantially in the last 6 months. As Ali pointed out above some items have doubled in price. For you to of not noticed a difference means you are either buying significantly less or changing your shopping habits to shop at a cheaper store/buy cheaper brands.

You are lucky you have the ability to walk to work so increasing fuel costs isn't having a major knock on effect to your own personal budget however not everyone is so fortunate.

My OH is a HGV driver rising fuel costs means his job is less stable now than it was 6 months ago and in the next 6 months who knows. A local haulage company has recently had to scale down operations losing 40 jobs, not a huge impact nationally but could possible me if its happening in every town and city up and down the country.

With regards to you wanting to buy a home in 6 months. I do not want to appear to be patronising but can you tell me how you plan to do this?? There quite simply isn't the 100% low interest mortgages available on the market and probably won't be for several years to come. Increasing day to day costs plus less job security mean 1st time buyers do not have the means to raise a 10+% deposit for a home plus even if they do a 90%ltv mortgage at the moment is costing more than a 100% ltv mortgage did 12 months ago. I really cannot see this being over in the next 6-9-12 months and to be honest I do not think we will even of reached the bottom then. Quite simply if the 1st time buyers are not there then those hoping to move up the chain either can't because they cannot secure a sale or can't because they cannot afford the increased mortgage and running costs of a larger home along with increased day to day expenses.

I am lucky my mortgage is fixed at 4.89% I think the average fixed rate is 6.4% at the moment

You only have to look at the amount of cost cutting on the high street at the moment to see that retail is also struggling. Many stores already have 50-70% summer sales on and we are only starting into July.

IMO this is just the start.

Lucy1982_2

Yes the media isn't helping and yes things will eventually get better.

But to imply that things aren't really THAT bad isn't going to help.

My petrol costs have gone up £10 a week in the 3 years I have had my car, mostly in the last year. Petrol is at £1.18 where I live, and this is having a knock on to 'normal, average' families.

While I work in property the company is a logistics company so our fuel costs are being passed onro customers, which means higher food cost in the shops. A loaf of bread has passed the £1 mark, and this is again impacting on lower income families.

My Mum got another below inflation pay rise this year, she has £30 a month spare after all her bills go out, she has no debts and is only just surviving. It is so bad she had considered getting another job. I am trying to get her to take my payrise money off me, so she doesn't have to worry so much.

siross, this is not directed at you, if you know what I mean, but I am really please you have a nice home and are still finding things good.

But from someone who 'only' earns £17,500 per annum and is just about coping, things aren't great. Mum takes home abuot £10,000 and is freaking out.

But things will get better, but it could be next year before that happens, it's just getting to that point that will be interesting :rolleyes:

rayday2

Siross consider yourself lucky, extremly lucky!

I relate more to lilacPixie, what you are reading and seeing on the news is not scaremongering it is the modern age of information. These days we are more informed.

You can't decide that because its only the housing market it will be ok losing jobs because its not just the housing market. My BIL works at a food supplier who supply M&S and Sainsburys to name two, his job is in danger, redundancies have happened and more are predicted. Even jobs at a local comp were pulled just before the closing date because the headmaster who has to look after his own budget could not afford the posts.

We see the housing job losses as the housing market plays a major role in deciding if the country is in or heading towards recession or growth. There are thousands more jobs going that are not as newsworthy.