Mortgages: Millions 'Struggle With Payments'

Mozette

IveSeenTheLight wrote: »

The thing is, should rates rise, what could you cut in order to budget accordingly?

Well I got rid of my car a few years ago, I don't go out very much because I got Sky; which ultimately would have to go along with nice food & drink. After that it would be essential stuff like heating and food of any kind. Not sure what else I could cut down on.

IveSeenTheLight

Mozette wrote: »

Well I got rid of my car a few years ago, I don't go out very much because I got Sky; which ultimately would have to go along with nice food & drink. After that it would be essential stuff like heating and food of any kind. Not sure what else I could cut down on.

There was an average list of expenses published a while back.
I roughly prioritised it (in my opinion) and deduced that the average household could reallocate 36.4% of their budget to higher priorities.

IveSeenTheLight wrote: »

Very Good.
Now, forgetting about the percentages for a second, what would most people priorities lie in order of necessities

For me: -
Food......118
Housing...238
Fuel and light...42
Household services..63 (Not sure what this is for given Fuel and Light are above)
Motoring...137
Clothing and footwear..44
Leisure goods.....36
Leisure services..64
Catering...47
Fares & other travel..20 (Motoring is above)
Household goods..65
Alcohol.....60
Tobacco...28

Taking clothing downwards, that's 36.4% that could be reallocated to higher priority on the list.

DecentLivingWage

IveSeenTheLight wrote: »

There was an average list of expenses published a while back.
I roughly prioritised it (in my opinion) and deduced that the average household could reallocate 36.4% of their budget to higher priorities.

Excellent list ..... also need ways to cut down on shelter costs,lodgers etc.

IveSeenTheLight

DecentLivingWage wrote: »

Excellent list ..... also need ways to cut down on shelter costs,lodgers etc.

Can you elaborate more?

Shelter Costs
We can show that those that have the ability to get a mortgage (deposits etc) are finding the affordability figures show the percentage of income spent on mortgage repayments is at one of the lowest points in history
http://www.lloydsbankinggroup.com/media/excel/2012/HPI_Quarterly/AffordabilityQ32012.xls

I'm struggling to find rental costs history, but we can see that rents increased approx 13.5% from Aug 2009 to Aug 2011.


You could of course also consider utility costs as part of shelter costs, but as these are impacted differently from each other, it's worth keeping them differentiated.

So we can see that shelter costs are lower for those with mortgages, whilst rental costs are increasing.

How do you resolve this? Well quite simply the root cause is the lack of available rental properties in comparison to availability in the 20th century.



Lodgers
Not sure where you're going with this one.
Lodgers would arguably contribute to paying for shelter in an accomodation and the use of lodgers would help support the available rental accomodation.

to cut down on the nuber of lodgers again it would seem more properties would have to become available.

Graham_Devon

IveSeenTheLight wrote: »

There was an average list of expenses published a while back.
I roughly prioritised it (in my opinion) and deduced that the average household could reallocate 36.4% of their budget to higher priorities.

Are those your figures, or have you seriously only given £238 to housing?

If they are your figures fine....but if you are suggesting those figures, well....it's a bit misinformed is it not!?

IveSeenTheLight

Graham_Devon wrote: »

Are those your figures, or have you seriously only given £238 to housing?

If they are your figures fine....but if you are suggesting those figures, well....it's a bit misinformed is it not!?

HeHe, they are not my figures.
Here's the original post from Generali
They are values out of 1000

Generali wrote: »

This simple version (link) opens as a .pdf.

2011 weights for the RPI:

Food......118
Catering...47
Alcohol.....60
Tobacco...28
Housing...238
Fuel and light...42
Household goods..65
Household services..63
Clothing and footwear..44
Motoring...137
Fares & other travel..20
Leisure goods.....36
Leisure services..64

They will correspond pretty well with how the average person in the UK spends his or her money. The above is out of 1,000 so the average person spends £2.80 on tobacco of every £1,000 they spend in total (that's spend not earn). A smoker will most likely spend a lot more than that and a non-smoker a lot less (probably £0) but Mr Average spends £2.80.

Here is a really good explanation of the RPI & CPI.