Credit Action stats out for Dec

Cannon_Fodder

If an "HPCer" was to post anecdotal evidence of the odd person/house here or there that fit a particular profile, that worked to the benefit of their side of the debate, I'm sure that the "positives", "anti-HPcers" (whatever shorthand I'm allowed to use without naming names and being accused of dragging someone who didn't deserve it into the thread)...would soon be leaping upon the thread to demand real evidence, facts, figures, that type of thing.

When given stats etc, they love to pull it to pieces and give anecdotal evidence...somewhat of a contradiction...

Yes, we can all point to someone doing some moderate borrowing that is not of much concern.

And I can personally point to myself, who has no debt beyond the monthly credit card bill that is paid by ddm every month on the dot.

There are, however, also individuals in sufficient numbers that have tens of thousands of pounds in debts, that leads the country to arrive at quite staggering sums of total debt.

More than our entire GDP...


And where there are good examples, like investing in a van; there are also appalling examples, like that newspaper article with a couple being repossessed because of the charge put on the house, when investing in a new, poorly investigated, business...


In the interest of putting a little perspective on proceedings;

Try reading page 3 of http://www.bankofengland.co.uk/statistics/li/2000/jan/lendind.pdf

January 2000; Net Lending Total was £613,565 Millions = less than HALF of the amount now, less than 10 years later. I call that a dependancy on debt.

Isn't cold turkey the cure for a dependancy?

Dithering_Dad

Cannon_Fodder wrote: »

If an "HPCer" was to post anecdotal evidence of the odd person/house here or there that fit a particular profile, that worked to the benefit of their side of the debate, I'm sure that the "positives", "anti-HPcers" (whatever shorthand I'm allowed to use without naming names and being accused of dragging someone who didn't deserve it into the thread)...would soon be leaping upon the thread to demand real evidence, facts, figures, that type of thing.

When given stats etc, they love to pull it to pieces and give anecdotal evidence...somewhat of a contradiction...

Yes, we can all point to someone doing some moderate borrowing that is not of much concern.

And I can personally point to myself, who has no debt beyond the monthly credit card bill that is paid by ddm every month on the dot.

There are, however, also individuals in sufficient numbers that have tens of thousands of pounds in debts, that leads the country to arrive at quite staggering sums of total debt.

More than our entire GDP...


And where there are good examples, like investing in a van; there are also appalling examples, like that newspaper article with a couple being repossessed because of the charge put on the house, when investing in a new, poorly investigated, business...


In the interest of putting a little perspective on proceedings;

Try reading page 3 of http://www.bankofengland.co.uk/statistics/li/2000/jan/lendind.pdf

January 2000; Net Lending Total was £613,565 Millions = less than HALF of the amount now, less than 10 years later. I call that a dependancy on debt.

Isn't cold turkey the cure for a dependancy?

CF, I don't think the 'pulling apart of statistics is limited to just the HPC biased stats. Perhaps because I'm a HPSer (House Price Stagnation) I can see this happening on both sides.

As far as the example with the van. I see what you're saying, but surely the very fact that this daft couple get into the papers reflects the fact that this is out of the ordinary, and so is not representative of the majority of people who have debt in this country. After all, we don't see many headlines screaming "Man buys van for business purposes!!!".

I think that for every 1 person like this couple who are stupid with their money, you'll find a thousand who use credit responsibly to buy cars, vans, houses etc.

WTF?_2

Pobby wrote: »

I sometimes have to laugh, as much as I so enjoy the posts here. I guess I am 20 to 30 years older than most of my fellow posters. Wow in that time things have really changed.

You know, when I bought my house, mid 70`s, it was no big deal. Save up the deposit, bit of a grovel and in you moves. With or without curtains, carpets, fridges and on and on. Can`t ever remember talking about mortgages to mates unless it was how to get one. Never though about being kicked out by the lender either. No rinky, dinky mortgage " products"! Variable rate and that`s ya lot.

Houses were so affordable. I was on around £1.5k a year and my wife a bit less. Had to have a reference from my employer saying that I would shortly be on £2.5k, in fact a year later I was earning an eye watering (for that time) £6.5k a year.

What, in hind sight made it so affordable was inflation. OK I did really well because of promotion as well but everyone started to earn more. Of course houses went up but not like the great over shoot we have seen.

About 1981 my next home was valued at about £30k. Joint income around £18k a year. Affordable!

So really it was no big deal. Heck, in 1981 you could still buy a 3 bedder terrace in the south east for a little over £20k.

Amazing how easily the notion that borrowing well over a hundred thousand pounds just to buy a basic starter home became accepted by the public at large.

Sheer madness ... if you haven't listened to this link to a Radio 4 documentary posted on another thread about the real state of the market, I highly recommend it:

http://www.bbc.co.uk/iplayer/episode/b00fl0jg/File_on_4_25112008/


What were people thinking? It's classic lemming behaviour.

kennyboy66_2

Dithering_Dad wrote: »

Why does Jimuth's light go out, just as !!!!!!'s light goes on? Very odd
indeed.

That's a load of Hong Kong Phooey

Dithering_Dad

kennyboy66 wrote: »

That's a load of Hong Kong Phooey

lol, is it Penry, the mild mannered janitor? Could be!

kennyboy66_2

Pobby wrote: »

You know, when I bought my house, mid 70`s, it was no big deal. Save up the deposit, bit of a grovel and in you moves. With or without curtains, carpets, fridges and on and on. Can`t ever remember talking about mortgages to mates unless it was how to get one. Never though about being kicked out by the lender either. No rinky, dinky mortgage " products"! Variable rate and that`s ya lot.

the hardest part was actually getting a mortgage - buildings societies seemed to have a limited amount of funds each month, and when it was gone, it was gone. You had to wait another month. Or at least thats how it seemed.

I hardly new any families with 2 cars until the early 1980's.

I still know a fair few people who have never used a cash point card, never mind possessed a credit card - any they are not that old !

Cannon_Fodder

Dithering_Dad wrote: »

CF, I don't think the 'pulling apart of statistics is limited to just the HPC biased stats...

...you'll find a thousand who use credit responsibly to buy cars, vans, houses etc

Hush your mouth, how dare you impinge the honor...! Oh, alright...

Granted! But its seems that way round at the moment, it'll probably swing back if we get another -0.4% or less from Haliwide.

Even those using "credit" - which I always feel should be called "debt" - responsibly are dependents. When a crisis, whether personal, corporate or national occurs, that dependancy is exposed.

Better not to have the dependancy if possible, imo.

Pobby

Thanks for the link !!!!!!? So true and kenny, you just about summed up house buying in the 70`s.

Look this mess was going to happen. A few of us stood aghast at what was happening from the start of this decade. We could see totally no reason why houses were roaring away.Ah but the bears put us right.

Large demand. OK so where were all those new buyers coming from. Had they been lurking in a large pit and all decided to buy at the same time. Ummmm. A good rising investment. No, it`s a home.

Oh I`m not going to bother to keep listing the mantras. We all know them.

Then panic set in as they rose and rose so more and more rushed in. In came the sub prime wallers to fill the gap lending to people that really shouldn`t have borrowed.

For every action there is a reaction.

What really worries me is the dreadful toll it will have on the individual.

purch

Amazing how easily the notion that borrowing well over a hundred thousand pounds just to buy a basic starter home became accepted by the public at large

Too true...

In 1993 I took out a £130,000 mortgage to buy a house for £345,000, when my base salary was £86,000 before potential bonus'.............and everyone I knew thought I was totally mad !!!!! :eek:

Less than 10 years later they would probably thought I was mad for borrowing so little !!!!!!!

michaels

Going back to the debt numbers I think there are 2 worries

1) the amount of debt as posted
2) the fact that it is no longer increasing

Neither looks good for the economy. I guess the only good news is if any of the reduction in interest rates is passed on debt servicing costs will be a lot lower so there will be scope for people to both pay down debt and spend more (or at any rate not spend less) so IF spreads don't widen to counter any reduction in interest rates then there is still some hope for avoiding total economic meltdown.