Household debt rises to highest level since 2008

michaels

Do we know if pcp car finance counts as unsecured debt?

How about mobile phone contracts?

antrobus

michaels wrote: »

Do we know if pcp car finance counts as unsecured debt?...

I would imagine it does. The data on comsumer credit levels comes from the lenders. Someone will be financing that PCP deal, and I'd guess they'd report it as a loan. From one point of view, PCP is just HP with a baloon payment at the end.

michaels wrote: »

...How about mobile phone contracts?

Banks etc report to the BoE. The ONS surveys other consumer credit grantors, i.e. non banks which are licenced by the OFT to grant credit, to get their data.

I don't know whether you you need a CCL to sell a mobile phone contract. Or a Sky TV contract for that matter.

michaels

antrobus wrote: »

I would imagine it does. The data on comsumer credit levels comes from the lenders. Someone will be financing that PCP deal, and I'd guess they'd report it as a loan. From one point of view, PCP is just HP with a baloon payment at the end.



Banks etc report to the BoE. The ONS surveys other consumer credit grantors, i.e. non banks which are licenced by the OFT to grant credit, to get their data.

I don't know whether you you need a CCL to sell a mobile phone contract. Or a Sky TV contract for that matter.

Thanks

I wasn't sure if perhaps the asset(car) might make the debt secure?

The stats say we buy cars differently now using more debt and less saving up. Obvuosly this means more debt overall but is it 'problem debt'?

lisyloo

michaels wrote: »

Thanks

I wasn't sure if perhaps the asset(car) might make the debt secure?

The stats say we buy cars differently now using more debt and less saving up. Obvuosly this means more debt overall but is it 'problem debt'?

In individual cases it won't be, but overall the statistical chances of it going bad for any reason (death, divorce, redundancy, sickness, general accident, car accident, high depreciation) have surely increased.

Graham_Devon

Note we reached another peak today compared to just before the crash.

House prices to earnings are now basically on a par with just before the crash.

So that's house prices and debt now both overtaking levels we saw pre credit crunch.

wotsthat

Graham_Devon wrote: »

Note we reached another peak today compared to just before the crash.

House prices to earnings are now basically on a par with just before the crash.

So that's house prices and debt now both overtaking levels we saw pre credit crunch.

Fingers crossed it'll lead to a nice crash.

Last time having squirreled away my pennies like a good little bear I managed to pick up a holiday home on the cheap. Next time I'm hoping to snap up the forever early retirement place. Maybe, just maybe.

How are you planning to profit? Please don't waste your time hand-wringing like before. It's pointless - action has been taken but people are determined to lend and borrow to buy crap they don't need to impress people they hate.

westernpromise

Well, except it didn't lead to a crash last time. The credit crunch did, and it was a correction, not a crash, rapidly reversed. I wouldn't get your hopes up too high just yet.

That said, there's a 5/6-bedroom Grade II listed house, with garage, offstreet parking and SW facing garden, near me I've got my eye on.

Although as nobody's biting at the asking price (lotsa work and you can't restructure it inside), I am thinking it will come off soon anyway without any crash.

wotsthat

westernpromise wrote: »

Well, except it didn't lead to a crash last time. The credit crunch did, and it was a correction, not a crash, rapidly reversed. I wouldn't get your hopes up too high just yet.

Yes my purchase was credit crunch led and, yes, it was a short and shallow correction

However, it was sufficient (in the absence of mortgages for the less well off) that I managed to buy my holiday place at c15% less than my neighbours and then saw prices recover in fairly short order.

I'm after some more of the same. I'm going to be buying a bigger place in a more expensive part of the country within the next 5 years whatever prices do (probably).

A quick fall in prices would shortcut my already early retirement plans and I might even be able to take a job as a hospital porter or something and enjoy a nice gentle glide down too.

As you've noted previously if you want to know who owns property after a crash check who owns it before because it'll be the same people. i.e. you, me and not Crashy.

westernpromise

I managed to buy my holiday place at c15% less than my neighbours....A quick fall in prices would shortcut my already early retirement plans

If those are your horizons there could indeed be some sense to buy in hoped-for dips. For most people the benefit has been illusory - either they failed and paid more, or they succeeded and bought somewhere for £80k in say 1992 rather than £100k in 1990. Today that place would be worth ~£400k and the £20k initial cost difference is likely to be dwarfed by other factors like refinancing cost over those years; so really just a rounding error of +/- 2.5%, as in, nobody knows what most houses are worth to that level of accuracy.

Over most people's typical horizon, or longer, the current price is neither here nor there for most purposes. Being in negative equity can be a short term inconvenience but at rates this low you pay it the mortgage principal off so fast it's unlikely to be a long-lasting problem.

wotsthat

westernpromise wrote: »

If those are your horizons there could indeed be some sense to buy in hoped-for dips. For most people the benefit has been illusory - either they failed and paid more, or they succeeded and bought somewhere for £80k in say 1992 rather than £100k in 1990. Today that place would be worth ~£400k and the £20k initial cost difference is likely to be dwarfed by other factors like refinancing cost over those years; so really just a rounding error of +/- 2.5%, as in, nobody knows what most houses are worth to that level of accuracy.

The key is to ensure the reasons for buying are sound. If they are then you just pay the market price and get on with it. It's just a happy coincidence if there's a 15% off sale at the time.

Currently I don't have sound reasons for buying the forever big house. 2022 looks much better for a number of reasons and I'll pay whatever the market price is at the time. A correction or distressed seller might make an earlier purchase look more compelling.

It's going to happen so it's quite distinct from the 'I'm only buying after a 50% crash' statements which when translated means 'I'm too scared to buy'.