Cautious consumers pay off debt

undetterred

Graham_Devon wrote: »

LOL, you can.

But does it really need absolute numbers to state the obvious? If so, I'll leave you guys to your ignorance.

Look grayham,a shiney thing.

Emy1501

RenovationMan wrote: »

No, we got ourselves debted up after the credit crunch.



That's more of a statement than a question. What do you mean by 'fair few'? A large majority of the UK population, a small minority?



Again, it depends on how large 'fair few' represents. I'd imagine though that the vast majority of mortgage holders were in positive equity and more than able to meet their debt repayments. However, unless you supply figures to show what 'fair few' means and show figures on how much debt this section of the population has repaid since 2007, we'll always be in the dark.

Doesn't really matter about the majority. The minority caused a price crash in 2008 when they were struggling to pay their mortgage rate and the same will happen once rates go up if their debt problem has not been addressed.

The fact that people are taking on less credit does not really mean anything if those struggling are taking on more. the rich won't bailout the poor. There is little evidence that the in debted are improving their situation and research by Co-op and Which suggests if anything its getting worse.

Just like Greece, Portugal, Ireland are holding back the Eurozone. A small minority of the population are holding the UK back and at sometime these people will need to be encouraged to sort out their debt levels.

RenovationMan

Emy1501 wrote: »

The minority caused a price crash in 2008 when they were struggling to pay their mortgage rate and the same will happen once rates go up if their debt problem has not been addressed.

We'll have to agree to differ about his point. I think it's been widely discussed and AFAIK completely proven that the 2008 global recession was not caused by UK housing defaults and as such I'm not about to spend the next few hours rehashing the same arguments.

Mr._Pricklepants

homelessskilledworker wrote: »

where as in you post earlier you spread it among the whole UK population.

No, it was me who said that.

wotsthat

homelessskilledworker wrote: »

I then gave you these un arguable statements to prove that the debt is spead between a minority of the UK population where as in you post earlier you spread it among the whole UK population. You also said that the £1.5 trillion was not that big a deal or words to that effect.

You've made an assumption - that's not proof.

It doesn't make a difference to the debt it's just another different way of expressing it. Using your link I expressed it as debt per household, if you want to express it as debt per working age adult that's up to you. The absolute number doesn't matter - what it means does.

I didn't say that £1.5tn wasn't a big deal. For absolute clarity it's a very large amount of money.

Emy1501

RenovationMan wrote: »

We'll have to agree to differ about his point. I think it's been widely discussed and AFAIK completely proven that the 2008 global recession was not caused by UK housing defaults and as such I'm not about to spend the next few hours rehashing the same arguments.

Who said it was. The crash here though was caused by a small amount of peoples inability to role over debt cheaply until rates were reduced to.5% by end of 2008/early 2009 when the crash stopped. Therefore if rates rise and these people have not sorted out their debt then the probelm will re surface.

RenovationMan

Emy1501 wrote: »

Who said it was. The crash here though was caused by a small amount of peoples inability to role over debt cheaply until rates were reduced to.5% by end of 2008/early 2009 when the crash stopped. Therefore if rates rise and these people have not sorted out their debt then the probelm will re surface.

I'm confused. Are you saying that the house price fall in 2008 was caused in isolation from the global events that resulted in Northern Rock, Alliance & Leicester, etc. failing and having to be bailed out by the tax payer? That the global credit crunch had nothing to do with UK house price falls?

Emy1501

RenovationMan wrote: »

I'm confused. Are you saying that the house price fall in 2008 was caused in isolation from the global events that resulted in Northern Rock, Alliance & Leicester, etc. failing and having to be bailed out by the tax payer? That the global credit crunch had nothing to do with UK house price falls?

Global credit crunch meant that those who took out 125%+ mortgages. Self Cert mortgages, BTl mortgages at 90%+ could not take out cheap mortgages and found themselves stuck on the SVR which some could not afford to pay. For prices to crash you need forced sellers and these were the forced sellers. Once IR's dropped many of these people found themselves of rates less than even when they first took out the mortgage. The Wilson are an example of this. They admit that they would have been toast if they did not get the base rate plus 2% from Mortgage Express.

The mortgage market will be closed to these people unless they have sorted out their debt when rates rise.

Therefore for the well being of the country these debts being sorted out is what is important.

RenovationMan

Emy1501 wrote: »

Global credit crunch meant that those who took out 125%+ mortgages. Self Cert mortgages, BTl mortgages at 90%+ could not take out cheap mortgages and found themselves stuck on the SVR which some could not afford to pay. For prices to crash you need forced sellers and these were the forced sellers.

So the crash happened because of forced sales and repossessions? I don't remember seeing much information about this in the press at the time?

pqrdef

Emy1501 wrote: »

For prices to crash you need forced sellers and these were the forced sellers.

Not often. The government propped them up, and if they didn't, the banks just had to turn a blind eye, because they didn't dare put the write-offs on their books.

But there are always lots of forced sellers, owing to death, decrepitude, divorce, promotion, etc. Doesn't stop them asking silly prices. Buyers will always stretch to silly prices if they're borrowing the money and they think the market is going up. The effective constraint is when they need a 20% deposit and they haven't got it.