Sunday, May 18, 2008
The real reason why property prices are so high manifests itself...
Guardian - The Observer: Epidemic of debt spreads to Britain's middle class
Easy money, borrowed to pay for extras and luxuries, is a big contributor to the problem, says Richard Blake, from Meridian Money Advice in Greenwich. 'Many of the people we are seeing borrowed money over the past couple of years simply because they could. I had a young semi-professional in last week who owns her home and had borrowed £25,000. When I asked her what she had borrowed the money for, she couldn't tell me. We never saw this kind of thing until recently,' he says.
Posted by inthedelhi @ 02:30 AM (458 views) Add Comment
4 Comments
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1. Stupid_boy_pike said...
This is all stacking up nicely.
As time goes by, with all the economic problems, the banks are going to see more and more repayments evaporate. What with repossessions in negative equity and the inability to pay back general credit, the banks will become even more cash-strapped. I'm seeing articles suggesting that the credit crunch is showing signs of ending. I think the problems down the line will just keep refuelling the credit crunch.
I have very little sympathy with the people in this article. They have just been plain irresponsible, and it has been this attitude that has got us into this mess.
2. alan said...
Heather Keates of CMA does a super job and needs to get the ear of a few politicians.
It's always being suggested that the way loans have been marketed bears some inspection and possibly regulation.
However, some people are dumb enough to apply for a high interest loan on the basis of an ad which says....." what could you spend £25,000 on?"
Should the UK regulate these loans more tightly? - and if the FSA do so, could they be accused of supporting a "nanny state"?
3. Doghouse said...
Over the past few years my partner has often wondered where we are going wrong - spend carefully, no kids, but how come all our friends and work colleagues have multiple (big) cars, kids, big houses and big holidays every year. I'd been telling him I wondered how much of it was debt driven...and now it seems a lot of it is probably based on unservicable debt...robbing peter to pay paul.
So I'm increasingly losing sympathy for people who find themselves up to their neck in debt, for no reason other than they wanted to live, and be seen to be living, the high life. These people haven't lost their jobs or had to deal with illness (such families do deserve help and sympathy), they have taken on more than their money-go-round could cope with, and got a bit too dizzy to realise the ride was coming to an end. Yes, the banks and the government could all have done more to protect these idiots from themselves (hmmm, nanny state not such a bad idea sometimes) but lets see people taking more responsibility for their lack of foresight and greed...but that would take honesty and self reflection, and blaming others is so much easier.
4. Gdbain said...
I don't feel sorry for any of them...