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Sancho Panza

Northerners Have Highest Debts, Says Bba

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Telegraph 18/12/13

'England's northern cities are home to the country’s most personally indebted individuals, with outstanding personal loan levels well above those in the South, according to the first detailed postcode data on bank lending. The citizens of Leeds have the highest per capita personal debt, at £1,516 per person, just over £100 more than second-placed Manchester, where the average resident has debts of £1,408.

Seven of the top 10 towns by personal debt are located in the north of the country, according to the British Bankers’ Association’s (BBA) analysis of postcodes and personal lending by the country’s major banks and building societies.

Of the top five, only Swansea is not in the north, while the top 10 is rounded out with two postcode districts in Milton Keynes.

In terms of total outstanding personal debt, the Greenwich borough of south-east London tops the borrowing table with a total of £13.5m of personal loans, ahead of Glasgow’s East Kilbride.

At the same time, figures released by the Council of Mortgage Lenders (CML) show London remains by far the biggest mortgage market in the country, with £227bn of outstanding mortgage debt – almost as much as the combined value of outstanding home loans to the North, Scotland, and Wales.

Paul Smee, director general of the CML, said: “As you would expect, strong levels of mortgage lending are broadly correlated with those areas where there is a strong resident population. While the data set covers only three-quarters of the mortgage lending market, it certainly shows that there are reassuringly few surprises in the postcode distribution of mortgage lending.”

All of the UK’s biggest lenders, including Barclays, Lloyds Banking Group, HSBC, Royal Bank of Scotland, and the Nationwide Building Society, took part in the survey, which offers the most detailed map available of personal borrowing and mortgage levels across the country.'

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I assume this figure does not include mortgages?

If so it makes sense that those in the south, having bigger mortgages, would have less personal debt.

Where house 'values' are higher you can withdraw more equity instead of taking out personal loans. That's not debt you see. Oh no siree. Thats cashing in on your shrewd investment in property which only ever goes up and why arent the young buying my house it must be the banks etc etc etc

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Vitrually the entire UK money supply/ credit creation mechanism is based on lending on property in London and the SE.

That credit flows into that local economy first raising house prices, local wages etc etc.

Savills sickeningly referred to this as "the champagne tower effect" where newly found wealth in the centre hoovers up property further out and it spills out across the country.

Pity those on the periphery as they are forced to use higher cost unsecured credit to exist. This article is partial and thereby nonsense.

Champagne tower or (longstanding) mispriced disequilibrium?

What it really means is that the currency/interest rate in the SE is too low relative to rest of UK and London/SE is supported by an ongoing wealth transfer from everywhere else.

The North suffered as capital moved away following the end of the industrial revolution and the cotton industry, and the same fate awaits London/SE when the financial services industry/tax haven status ends, unlikely as that may seem now.

Edited by R K

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Champagne tower or (longstanding) mispriced disequilibrium?

What it really means is that the currency/interest rate in the SE is too low relative to rest of UK and London/SE is supported by an ongoing wealth transfer from everywhere else.

The North suffered as capital moved away following the end of the industrial revolution and the cotton industry, and the same fate awaits London/SE when the financial services industry/tax haven status ends, unlikely as that may seem now.

And if London goes? What price the affluent North?

Any news on co-op job losses yet?

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Champagne tower or (longstanding) mispriced disequilibrium?

What it really means is that the currency/interest rate in the SE is too low relative to rest of UK and London/SE is supported by an ongoing wealth transfer from everywhere else.

The North suffered as capital moved away following the end of the industrial revolution and the cotton industry, and the same fate awaits London/SE when the financial services industry/tax haven status ends, unlikely as that may seem now.

Yep.

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