Over-indebtedness in britain

Bonia77

I'm interested what effect and increase of let's say 0.5% of IR will have on housing market.

I also suspect that there are lots of people who just cope...

Thrugelmir

mbga9pgf wrote: »

There are quite a few on the other homes forum on here that are starting to wake up to the nightmare.

And so many that just don't see it coming.

There is still a frightening degree of complancy. Something I blame the Government for to a degree and also the poor news coverage.

JP45

How about this as an example of reckless lending.

According to Michael Lewis (taken from his latest book 'The Big Short: Inside the Doomsday Machine'), at the height of the sub-prime housing market boom in the US, one deluded banker approved a $750,000 mortgage to a Mexican strawberry picker in California, who did not speak any English and whose annual take-home pay was $14,000.
.

peterg1965

People have clearly taken their lead from the Government who have been equally irresponsible with borrowing.

Daddy-Spendless

JP45 wrote: »

How about this as an example of reckless lending.

According to Michael Lewis (taken from his latest book 'The Big Short: Inside the Doomsday Machine'), at the height of the sub-prime housing market boom in the US, one deluded banker approved a $750,000 mortgage to a Mexican strawberry picker in California, who did not speak any English and whose annual take-home pay was $14,000.
.

surely the intention was to packge that loan up with more of the same and sell it on for a quick profit.

treliac

Daddy-Spendless wrote: »

surely the intention was to packge that loan up with more of the same and sell it on for a quick profit.

To a British bank?

kennyboy66_2

Thrugelmir wrote: »

The criteria for borrowing has changed noticably in the past 18 months. If for no other reason than the lenders taking high risks have left the market, sold out their loan books or been taken over.

Many people haven't yet comprehended that the rules have changed. As until they try and remortgage, move house , obtain consent to let they won't be aware.

The concern must be at the moment that while people adjust to a higher petrol prices, no pay rise and an increased cost of living. That the day of a rise in interest rates draws nearer.

After a year now, most people with mortgages have enjoyed historically low mortgage rates (even those on 6% aren't high in real terms). So there's a major hit heading that people may find hard to absorb.

The report is more to do with unsecured lending than mortgages, and already interest rates on credit cards for those unable to manage them, are punitive.

While 6% mortgages are not high in absolute terms, they are probably the highest real interest rates I've seen (if you compare with either base rates, inflation, or Wage inflation).

The big problem will be when the Gov't mortgage support starts to unwind.

treliac

lemonjelly wrote: »

1 in 5 are using one form of credit to pay off another form of credit

Demand for credit is strong

1 in 10 households are in structural arrears - peaking between Oct 09 - Feb 10

1 in 12 are paying 30% of their income on debt repayment. 1 in 8 are spending 20% on the same.

Is there any way, now things have reached this stage, that people who've got into these sorts of situations can be helped to get their finances straight in a managed way and without the loss of their homes and collapse of family life?

How do we, as a society, get past this and into a more sustainable way of life?

mbga9pgf

a further 10% reduction in GDP.

Pobby

I remember, some years ago, a certain lady gave us all a little lesson in equity. Cue funny rumpty- dumpty music. Picture of a house. Bit of a line across it. What was underneath the line was what you owed then another line above it. That was what it was worth. And do you know, that nice lady said that the top bit was what you could spend and she knew some very nice people that would give you that money. Ever so nice it was.