Wednesday, Nov 28, 2007
9% of UK mortgages are "sub-prime"
MSN: Trouble looms for a third of mortgages
LONDON (Reuters) - Up to one in three or 5.5 million mortgage holders in Britain could face serious financial difficulties as a result of the U.S. subprime crisis and the tougher lending climate it has created, a study showed. Mintel said 9 percent of British mortgage holders were classed as sub-prime, while a further 24 percent were "non-standard" and relatively high risk because they had irregular incomes.
Posted by uncle chris @ 08:41 AM (700 views) Add Comment
12 Comments
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1. stillthinking said...
"leaving more adults without the finances needed to buy property"
==
leaving more sellers without the buyers needed to prop (up) property
2. handle_it said...
So it seems as if a small drop in these "irregular incomes" (and that's happening) will have a marked effect over the next few weeks... I'm sure glad I don't have to worry about rapidly increasing borrowing costs with less income. The poo is midair and heading towards a very fast moving fan.
3. geed said...
Everything we all (HPC.co.uk bloggers) knew years ago. There is no such thing as sub prime in the UK according to the mass media up until 2 months ago.
These "experts" should be held accountable for the about turns, lies and propaganda. The vast majority of bloggers on this site have a greater understanding on the economy as a whole than any of these 6 figure earning parasitic boils. Do what YOU think is best.
I hate all the scum sucking parasites that call themselves economic experts, financial gurus and monetry journalists. They can predict nothing other than what is happening before their eyes.
Everything is fine until it isn't.
4. drewster said...
In the USA, "sub-prime mortgages accounted for only 3% of the total value of the US housing stock" (source: http://www.moneyweek.com/file/38567/is-it-time-to-get-out-of-equities.html).
I don't know if that 3% is directly comparable with the UK's 9% quoted in this article, but if so it makes the US subprime problems look like a walk in the park compared to what the UK can expect soon!
The same source goes on to explain that it's like BSE in a meat pie: nobody knows which cows went into which pies, so everybody stops buying pies. Great analogy!
5. converted lurker said...
on the basis that our equivalent to the US sub prime is buy to let we have (by my best estimation) a total of over 20% sub prime, 12% BTL+ 9% non conforming...
6. eyeoftheweasel said...
Hi Geed,
I agree totally with what you're saying about these so called 'experts'. As Northern Rock executives have been prone to say "nobody could have predicted" what would happen to the credit markets, etc. That's probably true if you completely ignore what's going on and do absolutely no intelligent analysis whatsoever, as seems to be the case with most of these 'experts'. Maybe their logic is, "If I keep saying the economy is fine, then my employer will keep increasing my salary." Maybe they're more intelligent than they've been credited with being after all, but probably not.
A lot of economics is common-sense, and that's something that these 'experts' seem to completely lack when they broadcast their opinions to the public.
I'd be interested to know if the 9% quoted in this article includes BTL, which is to all intents another sub-prime waiting to happen in the UK, or if it's just genuine sub-prime. BTL is something I don't believe was ever a significant factor in the US.
7. eyeoftheweasel said...
Lurker - "Snap"
8. handle_it said...
Quite clearly this whole thing could be predicted. The question is why it's happening ? What will it lead to ? Simply looking back and saying a child could have predicted this mess is missing the point. Is this actually being engineered ? Will this lead to an eventual state control of all assets,birth rates etc. Is a total meltdown of the present financial system what they want ?
9. paul said...
"Mintel said 9 percent of British mortgage holders were classed as sub-prime, while a further 24 percent were "non-standard" and relatively high risk because they had irregular incomes."
Oh. My. God.
9%.
The US had 5% subprime.
10. crash bandicoot said...
The problem is that we on this site are the Uber bears. Most of us have been predicting a crash since 2005. In the meantime lots of folks have made lots of money out of property (admittedly that includes Northern Rock etc.).
Back to the article, I saw a couple of months ago that only 8% of British mortgages are "subprime". This is taking subprime as meaning people who already have a poor credit history, the crucial factor that this misses is the number of people who are about to have a poor credit history. Looking at those with 5x salary mortgages, over £5k credit card debts, heavy MEW'ing or even those going through "lifetime events" such as divorce or redundancy. Taking a straw poll at work I suspect that 33% of people may be in this kind of circumstance. That is not an accurate figure - but hey, I am a VI!
11. sold 2 rent 1 said...
handle_it,
"The question is why it's happening?”
Absolutely spot on
I've stopped analysing land registry figures months ago.
It's the bigger picture that is more important and will affect us all.
The banking system is flawed and the people in power (government and banks) know it. It relies on an exponential debt growth to an exponential growing population.
We talk about a clash between east and west, Islam and Christianity.
This is the clash the people in power want us to see.
The real clash is between the people and powers that control us.
12. wiltshire said...
handle_it & sold 2 rent 1 -
I don't think the government are smart enough to plan something on this scale. I think they're (for obvious reasons) dealing with most things in a short-termist way and often just tend to react to events as they unfold. Sadly, they tend to react in a hamfisted way and generally try and ratchet up their laws, powers and controls but only because they don't know of any other way to relate to the people.
I'm hoping that once the great British public get their snouts out of the consumer frenzy trough they'll realise that we're reaching a fork in the road. Our society can either roll over and get royally sh*fted by 'the system' or we're going to have to demand better from our 'betters'. Many will have been totally softened up by the snouting but there's going to be enough people in this country who are suddenly going to realise their dreams have been stolen from them and/or they've paid themselves into a lifetime of debt for the priviledge of not very much in reality. Then things will get really interesting.