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KickThemInThePant

Debt Pandemic - The News Statesman 20th Oct

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Well written and objective article for those new to the board or passing through.

http://www.newstatesman.com/200510240005

Thinking twice about buying your first house?

A big mortgage right now risks financial suicide, concentrate on clearing debts and saving.

Edited by KickThemInThePant

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Well written and objective article for those new to the board or passing through.

http://www.newstatesman.com/200510240005

Thinking twice about buying your first house?

A big mortgage right now risks financial suicide, concentrate on clearing debts and saving.

why does everyone now state that the total debt is £1Trillion when it is in fact over £1.2Trillion. That's 20% higher!

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I note that this report is a cover story dated for Monday 24th October,

does that mean it will be published as a hard copy for monday

if so, should make for an interesting week once the rest of the press get on the band waggon

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If only I had a real newspaper for the 24th October. First to spot the horse race / football / or stock market results for the 24th please send me the link. Worth a £5 or a pint.

Perhaps its mass telepathy!

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why does everyone now state that the total debt is £1Trillion when it is in fact over £1.2Trillion. That's 20% higher!

A quick question. Can anyone give a figure on the servicing charge of this debt? I'm interested to know how much money the credit card bills are sucking out of the high street ( and pensions ) every month. I imagine its quite sobering.

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A quick question. Can anyone give a figure on the servicing charge of this debt? I'm interested to know how much money the credit card bills are sucking out of the high street ( and pensions ) every month. I imagine its quite sobering.

At 5% (conservative estimate, I know) it is £60bn a year, or £5bn per month in interest.

Seems v. high. Have a made an error?

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At 5% (conservative estimate, I know) it is £60bn a year, or £5bn per month in interest.

Seems v. high. Have a made an error?

No, that's right, using your example. £5bn is what Brown taxes out of pensions every year with his cynical money grabbing exercise, incidentally.

Here's some other figures that could make the amount more realistic:

http://www.creditaction.org.uk/debtstats.htm

Around £1tr of the £1.2tr (website still says £1.1tr) is mortgage debt. What is an average mortgage rate just now? 6%?

£50bn is credit card debts at high interest rates. I pay my credit cards off every month so am not even aware (or interested) in the rate, but the following website:

http://personalfinance.iii.co.uk/creditcards/ right down the bottom says the average is 16.1%.

That leaves £150bn in personal loans or other debt. Let's say 10% as a round average.

£60bn per year servicing mortgage debts.

£8bn per year servicing credit card debts.

£15bn per year servicing other debts.

That makes £83bn per year, or £1383 per person per year just to SERVICE, not pay-off, personal debt (that does NOT include national debt).

If you believe the average salary is £25k, then that's roughly £17k take-home.

While it's probably a meaningless statistic, that means 8% of take home pay is used, on average salaries and average debt for servicing of that debt. When you take into account that debt needs to be paid off to actually get out of the situation, then the figures get worse.

I know it's all back-of-an-envelope calculations, but they illustrate the point.

EDIT: I'm just going to recalculate the last few statistics, because I counted the whole population, not just the workforce.

http://www.statistics.gov.uk/cci/nugget.asp?id=12 says that the number of people working is 28.76m so that means that the personal debt burden is really:

£2886 per worker per year, or 17% of average take-home pay, just TO SERVICE that debt. Yet we don't have a debt problem, apparently.

Edited by aclwalker

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At 5% (conservative estimate, I know) it is £60bn a year, or £5bn per month in interest.

Seems v. high. Have a made an error?

I knew it would be high but £5bn a month? I'm not disputing the figures but that is STUPID for any govt to allow that to happen. That doesnt include student debt or mortgages.

I really hope one of those NuLab plants is reading this, you lot are traitors to have engineered this. Do you care at all for the future of this country? Is there anything you wont do to stay in power?

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I note that this report is a cover story dated for Monday 24th October,

does that mean it will be published as a hard copy for monday

if so, should make for an interesting week once the rest of the press get on the band waggon

I doubt it. New Statesman has only 14 readers.

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At 5% (conservative estimate, I know) it is £60bn a year, or £5bn per month in interest.

Seems v. high. Have a made an error?

Oh, and thank you for the figures STF. :D

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Well written and objective article for those new to the board or passing through.

http://www.newstatesman.com/200510240005

Thinking twice about buying your first house?

A big mortgage right now risks financial suicide, concentrate on clearing debts and saving.

THIS SAYS IT ALL. I have been saying this for well over a year here on HPC - and for 2-3 years before that -- it is all just totally logical -- TIMBER!!!!!!!

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£1.2 debt.

£5.0 assets.

According to Evan Davies we have 5 times more assets than debts, so the debt issue isnt as potent as one might suppose.

Remember we own a lot of real estate in the rest of the world, not just Spain, where property tends to be mortgage free anyway.

More people than ever own business's so higher debt is also as a consequence of people leverdging thier business.

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£1.2 debt.

£5.0 assets.

According to Evan Davies we have 5 times more assets than debts, so the debt issue isnt as potent as one might suppose.

Remember we own a lot of real estate in the rest of the world, not just Spain, where property tends to be mortgage free anyway.

More people than ever own business's so higher debt is also as a consequence of people leverdging thier business.

Total ********. Wheels coming off Spanish "Property Market" right now....... it will all self-implode.

Can someone please put this - http://www.newstatesman.com/200510240005 - in the window ASAP!!!! Very very good article.

Edited by eric pebble

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£1.2 debt.

£5.0 assets.

According to Evan Davies we have 5 times more assets than debts, so the debt issue isnt as potent as one might suppose.

Remember we own a lot of real estate in the rest of the world, not just Spain, where property tends to be mortgage free anyway.

More people than ever own business's so higher debt is also as a consequence of people leverdging thier business.

most 'assets' are speculative financial capital. what happens when assets get sold in large volumes? the value collapses. the total value of the FTSE100 is nonsense as too is the total value of the UK housing stock. it is based on confidence and nothing else.

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Total ********. Wheels coming off Spanish "Property Market" right now....... it will all self-implode.

Can someone please put this - http://www.newstatesman.com/200510240005 - in the window ASAP!!!! Very very good article.

Eric, I know a permabear who's been saying what u spout for 10 years.

He's been wrong for over 5 million minutes.

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Total ********. Wheels coming off Spanish "Property Market" right now....... it will all self-implode.

Can someone please put this - http://www.newstatesman.com/200510240005 - in the window ASAP!!!! Very very good article.

Agreed. Is this £5.0 assets to £1.2 debt based on inflated valuations?

Remember the valuations of assets can go down, a lot. But the valuation of debt stays the same, bar wage inflation or actually paying it off.

The ratio could very easily go to £2 to £1.2.

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While it's probably a meaningless statistic, that means 8% of take home pay is used, on average salaries and average debt for servicing of that debt.

Not meaninless, before MEW crashed, on average 8% of peoples annual incomes was MEW, people remorgaging there houses to live on....

On average 8% of take home pay is used to service debt

On average people were increasing there take home pay last year by 8% by remorgaging there houses.

Quite a coincidence :P

Edited by moosetea

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Agreed. Is this £5.0 assets to £1.2 debt based on inflated valuations?

Remember the valuations of assets can go down, a lot. But the valuation of debt stays the same, bar wage inflation or actually paying it off.

The ratio could very easily go to £2 to £1.2.

Classic bear rationalle.

The world just doesnt work the way you guys think it ought to.

Humanity doesnt give up so easily.

If humaity followed your argument to its logical conclusion, no new companies would ever start, exploration of space and the deep would end, ambitious young sportmen would roll - over and give in to the odds.

We all know assets are merely etheral consequences based on sentiment.

You permabears think we should all clear our mortgages, pay - off debts, only invest cash into a new business or investment. Basically, your all chickens thats why B2L passed you by.

Property is for the brave alone.

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Eric, I know a permabear who's been saying what u spout for 10 years.

He's been wrong for over 5 million minutes.

What are you saying, 17% of post tax salary spent on servicing unsecured debt ( according to ACLs figures ) is nothing to worry about with interest rates rising?

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£1.2 debt.

£5.0 assets.

According to Evan Davies we have 5 times more assets than debts, so the debt issue isnt as potent as one might suppose.

Remember we own a lot of real estate in the rest of the world, not just Spain, where property tends to be mortgage free anyway.

More people than ever own business's so higher debt is also as a consequence of people leverdging thier business.

And your point?

Debt has to be serviced i.e. there is interest to pay on it. Distribution of assets is very uneven i.e. something like 80% of the wealth (assets) in the UK held by a very small amount of people that probably don't have any debt. The largest proportion of debt probably owned by those with little or no assets.

Go figure

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Classic bear rationalle.

The world just doesnt work the way you guys think it ought to.

Humanity doesnt give up so easily.

If humaity followed your argument to its logical conclusion, no new companies would ever start, exploration of space and the deep would end, ambitious young sportmen would roll - over and give in to the odds.

We all know assets are merely etheral consequences based on sentiment.

You permabears think we should all clear our mortgages, pay - off debts, only invest cash into a new business or investment. Basically, your all chickens thats why B2L passed you by.

Property is for the brave alone.

People like dogbox display all that is wrong with capitalist mentality. All money money money and no abilitly to think about the affects on society, a society that suffers the consequences and ultimately is worse for all of us to live in. Sad really.

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  • 301 Brexit, House prices and Summer 2020

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      • down 5% +
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