People are not helping themselves

ukcarper

Pimperne1 wrote: »

Part of the problem could be that only about 70% (or is it less now?) are owner occupiers so 30% don't have any mortgage debt. Further, I wouldn't be surprised if there are not a very large number of home owners out there who have no mortgage at all (so I would say the number of people who have mortgages is probably less than 50% of households.

That’s why I doubled mortgage dept in my calculation. If you use the often called for 3x main income and 1 x second income for mortgages, using average pay that would roughly equal the figure I used.

Cleaver

DSM wrote: »

It's all about perception and how YOU see it from your viewpoint.

£15k might seem like small fry for you, your family or even your circle of friends, £8k even less so but for a hell of a lot of people, that is simply a lot of money! and money people just do not have. £15k is probably an average annual semi-skilled wage round these parts! With rising costs all round what little is left over from general living costs is getting less and less to service said debt.

Good post. A few confusing stats to throw in to the mix though...

This article, although from 2007, gives some interesting stuff:

Across Britain 29% of households have no savings whatsoever while a further 42% have between £1 and £10,000. The average household savings are £31,300. With 71% of households having less than £10,000, the richest 29% clearly have the lion’s share.

What's worrying is that the 29% of households with no savings are probably the ones with lots of debt. But if we just look at averages, then according to the dudes in this article the average household has £31,300 in savings. So not only could the average household pay off the average unsecured debt, they could also get quite close to hammering off the remaining mortgage. But as it says, 71% of households have less than £10,000 in savings, so you can say anything with stats.

Oh, and according to The Mail we're all worth an average £204,000 each anyway, so why are we worried about a measly £55,000 debt?

casper_g

PasturesNew wrote: »

Because one day it'll go up - and you'll spend the rest of your life wishing you had.

IF, and it's a big if, chucknorris's mortgage money is instead earning interest (of more than 1%) and if the mortgage allows unlimited overpayments to be made when the interest rates go up, then it would make sense not to pay more than necessary now, wouldn't it?

Cleaver

Graham_Devon wrote: »

Who would you sell it to?

Our house? To someone who wanted it at a price we both agreed on.

Graham_Devon

The average household in mean terms has that much.

But it clearly states 71% of households have less than 10k.

If people want to state this is all ok, then feel free to do so. Everything is always ok in the opinion of someone on the board, no matter what it is thats being discussed. But the use of averages to state it's all ok is misleading in this situation.

Have to say though Cleaver, your turning into one of the forums largest optimists!! Grass is always green in your posts, gotta give you that!

Think what people appear to be missing is the spread on the numbers, averaging over households, and automatically assuming that the nation has all bought a house within the last 5 years....therefore are expecting the debt to be higher.

Pimperne1

ukcarper wrote: »

That’s why I doubled mortgage dept in my calculation. If you use the often called for 3x main income and 1 x second income for mortgages, using average pay that would roughly equal the figure I used.

Sorry I wasn't really responding to your post but £95k seems a bit more realistic.

Cleaver

Graham_Devon wrote: »

The average household in mean terms has that much.

But it clearly states 71% of households have less than 10k.

If people want to state this is all ok, then feel free to do so. Everything is always ok in the opinion of someone on the board, no matter what it is thats being discussed. But the use of averages to state it's all ok is misleading in this situation.

Have to say though Cleaver, your turning into one of the forums largest optimists!! Grass is always green in your posts, gotta give you that!

I've changed my mind to be honest, it all looks quite grim. And to be fair Graham, saying that I'm an optimist compared to the other people on this forum is a bit like saying I'm the happiest person at a gathering of depressives. It's all relative really, isn't it?

Cleaver

geneer wrote: »

Why? Its an average. Of every household in Britain.

Maybe interesting when monitored over time.

But in and of itself pretty much meaningless.

Good point.

Graham_Devon

Cleaver wrote: »

Our house? To someone who wanted it at a price we both agreed on.

If we all sold our assets, who would you sell it to?

To realise your assets, you have to succesfully sell them. If we all did that to realise our asset worth, who would be buing it all up?

Cleaver

Graham_Devon wrote: »

If we all sold our assets, who would you sell it to?

To realise your assets, you have to succesfully sell them. If we all did that to realise our asset worth, who would be buing it all up?

If, as a nation, we all tried to sell our assets at the same time? We'd be screwed and the entire financial system would fall over. It's unlikely to happen though.

Graham what point are you trying to make? I was just saying that our debt to income ratio looks bad, but even if we sold just our investments and cashed in our savings we'd nearly be debt free. So we're not in a bad a position as the 196% debt to income ratio we have.