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Interesting news, it could well be that they have been suffering from bad debts, coupled with the blow to confidence that the slowdown in the house market has caused. Are people starting to realise now their house isn't going up 20k a year that they cant afford to take on anymore extortionate debts?

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Expecting a revisitaton of the the Endowement Mortgage scandal?

As some smart person on this website pointed out, an interest only mortgage is like an endowment mortgage, only it doesn't have the endowment. :blink:

People are going to figure this one out soon...

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As some smart person on this website pointed out, an interest only mortgage is like an endowment mortgage, only it doesn't have the endowment.  :blink:

People are going to figure this one out soon...

I've been interested in the potential correction for a few years now.

About 6 months ago I was at a party where I met a single girl, a couple of years younger than me. She had been desperate to have her own place, and borrowed to the max with an interest only mortgage, because she "couldn't afford a repayment mortgage".

I tried as gently as I could to explain that if she couldn't afford repayment, she shouldn't buy at all.

She had no contingency, virtually no deposit / equity, but dismissed my suggestions, because she "liked" having her own place.

A lad I met also at the same party, in on this group discussion, was going through a divorce. After the divorce, he expected to have about 20k out of the house, and planned to go back into the market as a FTB using the 20k as deposit, claiming renting was dead money. I was telling him about how to calculate whether renting really was dead money. He seemed interested and gave me his email address so I could send him some info.

I sent him some links to this site alongside some others, particularly the graphs and FTB warning pages.

I never had a response...nor a non-delivery notification. I wonder why? :rolleyes:

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Expecting a revisitaton of the the Endowement Mortgage scandal?

Indeed, remember that Endowment's were about selling people Interest Only mortgages then shoving some money in the stock market hoping it will pay off the principle. It was a good idea, provided your timing was right and you were able to miss the biggest stock market meltdown since 1929.

Now we're onto Interest Only mortgages alone, these have been pushed a lot of late given the affordability problems, at least even a crappy endowment that has performed badly may pay off 66% of the principle.

If they're selling IO alone without any future funding, where's the money going to come from? Up until recently IO was only used by developers for the short-term as an alternative to a bridging loan, now even 19's year old chav's are borrowing £250k on them.

BTL and IO mortgages are going to really hit the fan in a seriously bad way, remember that the first was sold to middleclass wannabe landlords, they never accept the consequences of their own actions, look at endowments, split caps, Railtrack shareholders, Equitable or even the 2:30 at Chepstow, when things go wrong somebody has to be to blame, there has to be recompense for their own stupidity.

IO mortgages will be like Lloyds TSB personal loans, they will be cast as vulnerable victims exploited by the banks now in need of a bailout. You know the brigade "they made me walk into my local branch of Lloyds, they forced me, they made me borrow £50k, they made me spend it on useless tat that has now gone, now they want their money back ?!? I can't pay, I have nothing to show for it, they shouldn't have thrown money at me, poor me" :huh:

Whether you feel sorry for them or not it doesn't change the fact it has to be paid back, or written off. That's really going impact the debt instruments and bonds being held by pension funds and alike.

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The low level of financial literacy in this country is appalling, but maybe not

surprising after so many years of a Nanny state

Something I moan about constantly. But I don't think its the Nanny state I think its the failure to provide good numeracy skills at school (and probably too much tinkering around with tried and true methods of getting the knowledge across). What is wrong with learning the times tables rote? Its not like its a social science where varying opinions might be involved (12x12=144... or is there some new fangled theory based on chaos???).

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The low level of financial literacy in this country is appalling, but maybe not

surprising after so many years of a Nanny state

I think the use of language comes into it , take "Tax Credits" for example, people would equate that to a credit card or alarmingly the other way around now, money is 'credited' and never needs to be paid back, even if there is an error people understandably are upset about having to refund their credit. Also, it's a credit without there ever being a 'debit' in many cases. So when somebody applies for a 'credit card', what gives?

Now, I'm not disputing the nobility of an overly complex system that aims to give people back their own money, minus an administraion fee, however the syntax is interesting, no doubt it impacts on financial literacy :rolleyes:

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Something I moan about constantly.  But I don't think its the Nanny state I think its the failure to provide good numeracy skills at school (and probably too much tinkering around with tried and true methods of getting the knowledge across).  What is wrong with learning the times tables rote?  Its not like its a social science where varying opinions might be involved (12x12=144... or is there some new fangled theory based on chaos???).

totally agree

we spent hours memorising times tables and other stuff that is locked in my brain until i die.

my generation( ie oldies) can do mental arithmetic and understand numbers whereas todays young adults rely on calculators and havent grasped the basics of numeracy.

they therefore lack confidence and insight in calculations.

in my youth( sorry to sound a bit victor meldrew) even people destined for manual jobs had good maths and reading ability that would shame the average 21st century uk undergraduate.

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totally agree

we spent hours memorising times tables and other stuff that is locked in my brain until i die.

my generation( ie oldies) can do mental arithmetic and understand numbers whereas todays young adults rely on calculators and havent grasped the basics of numeracy.

they therefore lack confidence and insight in calculations.

in my youth( sorry to sound a bit victor meldrew) even people destined for manual jobs had good maths and reading ability that would shame the average 21st century uk undergraduate.

I agree, partly.

If people wanted to learn at school/college they did, and I did (i'm 24).

I think the problem today is it is too easy to rely on tools, like Calculators, or to rely on others for information (e.g. the ins and outs of financial products) rather than doing their own homework.

There are a few wise youngsters out there, I like to think I'm one of them!

Edited by Jason

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I agree, partly.

If people wanted to learn at school/college they did, and I did (i'm 24).

I think the problem today is it is too easy to rely on tools, like Calculators, or to rely on others for information (e.g. the ins and outs of financial products) rather than doing their own homework.

There are a few wise youngsters out there, I like to think I'm one of them!

are you suggesting we return to the age before the invention of the wheel ?

how would we make future episodes of wheel of fortune then - without tools ?

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Something I moan about constantly.  But I don't think its the Nanny state I think its the failure to provide good numeracy skills at school (and probably too much tinkering around with tried and true methods of getting the knowledge across).  What is wrong with learning the times tables rote?  Its not like its a social science where varying opinions might be involved (12x12=144... or is there some new fangled theory based on chaos???).

Actually my personal experience of why most students didn't get a good maths education. Too many teachers espousing the idea that maths was terribly complicated and was really something only the most elite intelligent students could grasp and that they really were wasting their time trying to teach the rest. Why are maths and science considered to be more difficult than english and history in so many schools. Students will only find a subject difficult if they have an inadequate teacher. (I got an A in maths despite the teaching not because of it)

This country really doesn't value or understand maths and science, I have always argued that it is impossible to have a true democracy if the electorate are numerically illiterate because they can be fooled by statistical lies.

Rant over. :)

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They teach things differently too... the way I learnt to do multiplication is different to the way my son is taught. School has offered us a maths learning session to be shown how to do it so parents can assist...

It always seemed very logical the way we were taught things so will be interesting to have this enw way explained...

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are you suggesting we return to the age before the invention of the wheel ?

No. Did I suggest this?

how would we make future episodes of wheel of fortune then - without tools ?

What I was saying is people rely on these tools too much - "computer says No" attitude.

How many times do people need to use mental arithmetic and think for themselves? To workout anything on the spot? Such as... "Have I've been short changed?"

The more important point is how people base decisions on other peoples opinions, and don't analyse/think anything for themseleves.

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No. Did I suggest this?

What I was saying is people rely on these tools too much - "computer says No" attitude.

How many times do people need to use mental arithmetic and think for themselves? To workout anything on the spot? Such as... "Have I've been short changed?"

The more important point is how people base decisions on other peoples opinions, and don't analyse/think anything for themseleves.

this is simply progress.

i bet there were traditional cave men who didnt trust this new fangled wheel and preferred the old fashioned method of dragging.

ughh. mmm.. aroogah.....ughh.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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