Over-indebtedness in britain

nearlynew

Harry_Powell wrote: »

I saw a thread ages ago where a woman was asking how to get the HPI out of her house. It had 'gained' £20k and she wanted that £20k to spend on stuff.

She couldn't quite grasp that she would have to sell her house or remortgage to get at it. Unbelievable!

I have said this before.......

During the boom, there were thousands of people out there who, having heard reports that house prices are going up by £100 per day, imagined their lender putting £100 per day into their special little pot on the shelf.

To these people, remortgaging was just going along and taking their money from the pot.

MrEnglish

kennyboy66 wrote: »

Moneyweek.

Kenny can you prove that you didnt make up your sig?

Im sure youv been asked before.

kennyboy66_2

MrEnglish wrote: »

Kenny can you prove that you didnt make up your sig?

Im sure youv been asked before.

It is almost too good to be true from 'the end is nigh' team at Moneyweek.

And its very difficult to find on their website as their archived articles only go back to 2006.

However;

US housing: it's not a bubble

By James Ferguson Dec 12, 2005

http://www.moneyweek.com/investments/property/us-housing-its-not-a-bubble.aspx

Mr.Brown_4

kennyboy66 wrote: »

It is almost too good to be true from 'the end is nigh' team at Moneyweek.
http://www.moneyweek.com/investments...-a-bubble.aspx

So the end is nigh team made a bullish statement that turned out to be incorrect becuase it was a bubble?

And this proves a point of yours?

In what way?

kennyboy66_2

Mr.Brown wrote: »

So the end is nigh team made a bullish statement that turned out to be incorrect becuase it was a bubble?

And this proves a point of yours?

In what way?

Someone asked a question, I thought it polite to reply.

Thrugelmir

kennyboy66 wrote: »

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.

Agree totally. What needs to be considered is that not so long ago clearing unsecured debt was possible by remortgaging equity gains on property.

Now the debt is sitting on the plastic and there's no way of clearing it down for the next spending binge.

Like the party game "pass the parcel" the music has stopped.

lemonjelly

treliac wrote: »

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?

My personal views treliac:

Make lenders a lot more responsible than they currently are when agreeing a loan/form of credit. Creditors basically cop out a lot, don't care too much about ability to repay, especially if you're a homeowner.

Better access for many to cheaper forms of credit for more people.

Better education for all on financial services, financial products, budgeting.

I'd also be inclined to drastically change what happens post bankruptcy. From my point of view, the implications of bankruptcy are over too quickly, not giving people the time to learn from their experience. In example, I would link the length of time until you are discharged, to the level of debt included in the order. Currently, that doesn't happen, & unless you have a gambling addiction, your order is likely to be revoked after 12 months.

Ther are loads of other things I'd do, such as set maximums that individuals can borrow, but these are deeper theoretical ideas, & I'm typing too many long posts today & my fingers hurt!

treliac

Thanks lj. I'd love to see your ideas implemented but wonder if any political party would have the commonsense to do so. It would upset a lot of vested interests I suppose!

iB1

Education really is the key... at an earliest age as possible.

I've seen 18 year old girls with their 33.3%APR store cards buying clothes as if they are going out of fashion

21 year old blokes buying brand new cars - which obviously depreciate horribly - all on credit

Homeowners who have fallen into the release equity trap as the "house prices only go up innit" property !!!!!!-peddlers snared their victims.

I think there are two main problems:

1) Lack of basic financial understanding. People don't understand how interest works and also don't want to read the small print of financial agreements. People get annoyed when they sign up for a "free" phone on a 24-month contract and then find out they have to pay up to get released early from it? Duh!

2) We have become an entitlement generation: Everyone wants everything now. I don't want to save, I'll just whack it on a credit card. I don't want to save, I want my house to increase in value whilst I do nothing, so I can release equity and go on 5-star holidays etc. etc.

I hope this new financial climate enables change, but to be honest I'm not hopeful. I think there will be vast swathes of the population who are trapped by secured/unsecured debt and will be for many years to come.

Ingsy

I'd be interested to hear about the financial education people are mentioning - how would it work exactly? And what would you teach?

I'm crap at working out interest rates. I'm not even sure I could do it in my head. AER & APR? No idea of the difference.

However, I'm not in debt. Well, student loan and sensible sized mortgage. I save up for stuff. Only put stuff on a credit card that I know I can clear at the end of the month.

The point I'm making is that "we must have financial education!!1111" doesn't really say a whole lot - and I'm not convinced it's the right thing to do. Surely it's a whole lifestyle change that's needed instead?