Tuesday, Apr 10, 2007
Would you Adam and Eve it? Even the BBC are (gently) raiseing doubts
BBC News: Head to head: Using your house as a wallet
House prices continue to rise briskly (don't you just love the BBC). And since the start of the decade, UK home owners have borrowed an astonishing £264bn against the rising value of their homes. But is this borrowing, known as mortgage equity withdrawal, a good thing? Two commentators argue the case: Julia Debt-i-more and David Kuo from Fool.co.uk.
Posted by harold @ 11:34 PM (135 views) Add Comment
5 Comments
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1. jason said...
So, the argument is that MEW is fine because people get into debt anyway, and this is the cheapest form of debt.
Typical BBC... lets encourage more MEW (note which argument always comes first).
2. Davros said...
At the end of the day debt is debt and it'll have to be paid back. That's why for every credit boom there has to be a bust of equal magnitude.
3. uncle tom said...
Quite a balanced piece, with the second commentator making a much more convincing argument.
However, he fell into the dreaded 'average' trap - everyone does not borrow 6% over and above their income - most borrow nothing extra at all - but there is a very large minority, possibly as many as five million - who are out of their depth and utterly dependant on ever increasing debt.
Crisis? What Crisis?
4. Chillilizard said...
Julia Dallimore labors the phrase 'for some' a bit much. Also her advice of taking out a secured loan for many people in deep financial &*(*& is the worse kind of advice. If you have to declare bankrupcy, there are limits to what they can take from you, such as the roof over your head.
Good advice from the Fool. Have you noticed how they have one sentence per paragraph. I think its to make it easier for us to understand.
Now for my 2 pence:
If everyone were to suddenly receive a windfall of 10000 pounds, everything would end up costing 10000 pounds more; the fundamental meaning of inflation. Its the same when everyone loans 10000 pounds.
Except that now, everyone owes 10000 pounds to the banks, for receiving the same amount of goods. Along with the interest repayments is also the guilt etc, etc. And it all unnecessary. Easy credit is really the theft of the middle classes. Its slavery. Its just phrased differently.
5. bidin'matime said...
At least both sides of the argument are there.
Uncle Tom - are you the Uncle Tom of old (not that old, of course..) - everyone thought you'd 'bought it' (the house, I mean) last year when you dissappeared. You'd been reported as saying you would hang on until October (06) and if nothing changed, you would buy. So fill us in - what's the story??