Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

Rise In Mortgage Lending Is Paying Off Credit Cards

Recommended Posts

http://portal.telegraph.co.uk/money/main.j.../ixcitytop.html

CARD DEBT PAID WITH MORTGAGES

Daily Telegraph

2nd March 2006

British debt has hit new heights as thousands of families remortgage their homes to escape crippling credit card repayments. The amount Britons owe to banks and building societies leaped to £10bn in January.
It means the total amount owed by Britons has increased to £1,168bn - comfortably above the country's annual economic output.
Ross Walker, UK economist at Royal Bank of Scotland, said: "This is the last thing the MPC wanted, as evidence builds of a new sort of 'liquidity trap' where lower interest rates apparently do little to stimulate the real economy, merely encouraging ever greater borrowing to further inflate existing asset prices.

Now we know why there was a jump in mortgage lending last month. When the houses are being used to pay short term debt with long term debt there is SERIOUS trouble. This looks like the last desperate gasp of Gordon "Miracle Economy" Brown's debt culture.

HPC 2006.

Also:

http://portal.telegraph.co.uk/money/main.j...M8&targetRule=1

Mortgage lending also defied the doomsters in January. The £9.2bn rise was the highest since April 2004.
This is an interesting place to be. Low interest rates are having the
undesirable effect
of inflating asset prices and swelling personal debt without bringing a more desirable stimulus to the real economy. No wonder the MPC is sitting on the fence.

Retail crashing and yet debt rising? A strange place to be indeed.

VIs admit that is where it's going:

http://property.scotsman.com/news.cfm?id=316442006

But relief may be still be on the way for hard-pressed retailers,
as strong mortgage lending and consumer credit should show through in higher spending in the high streets
in the coming months.
Edited by Realistbear

Share this post


Link to post
Share on other sites

http://portal.telegraph.co.uk/money/main.j.../ixcitytop.html

CARD DEBT PAID WITH MORTGAGES

Daily Telegraph

2nd March 2006

British debt has hit new heights as thousands of families remortgage their homes to escape crippling credit card repayments. The amount Britons owe to banks and building societies leaped to £10bn in January.
It means the total amount owed by Britons has increased to £1,168bn - comfortably above the country's annual economic output.
Ross Walker, UK economist at Royal Bank of Scotland, said: "This is the last thing the MPC wanted, as evidence builds of a new sort of 'liquidity trap' where lower interest rates apparently do little to stimulate the real economy, merely encouraging ever greater borrowing to further inflate existing asset prices.

Now we know why there was a jump in mortgage lending last month. When the houses are being used to pay short term debt with long term debt there is SERIOUS trouble. This looks like the last desperate gasp of Gordon "Miracle Economy" Brown's debt culture.

HPC 2006.

Also:

http://portal.telegraph.co.uk/money/main.j...M8&targetRule=1

Mortgage lending also defied the doomsters in January. The £9.2bn rise was the highest since April 2004.
This is an interesting place to be. Low interest rates are having the
undesirable effect
of inflating asset prices and swelling personal debt without bringing a more desirable stimulus to the real economy. No wonder the MPC is sitting on the fence.

Retail crashing and yet debt rising? A strange place to be indeed.

VIs admit that is where it's going:

http://property.scotsman.com/news.cfm?id=316442006

But relief may be still be on the way for hard-pressed retailers,
as strong mortgage lending and consumer credit should show through in higher spending in the high streets
in the coming months.

Thank the Lord above for the Telegraph...it is the only newspaper that I trust anymore:

Grauniad: Mouthpiece for NuLabour

Independent: Mouthpiece for NuLabour

The Times: Rapidly going downhill IMO

Share this post


Link to post
Share on other sites

Funny thing is, people can move credit card debt into the mortgage, but can they fix their bad habits of using credit cards? I'm betting their credit cards will be up up n away within a year PLUS they will have the previous debt in the mortgage debt!!

Share this post


Link to post
Share on other sites
But relief may be still be on the way for hard-pressed retailers, as strong mortgage lending and consumer credit should show through in higher spending in the high streets in the coming months.

B0ll0cks.

Relief is not on the way for hard-pressed retialers.

This MEWed money isn't being MEWed for consumption as before... its mainly being used to pay off the debts incurred by previous consumption.

People (in general) have spent too much in the last few years. Now its time to pay it back. :D

Share this post


Link to post
Share on other sites

Funny thing is, people can move credit card debt into the mortgage, but can they fix their bad habits of using credit cards? I'm betting their credit cards will be up up n away within a year PLUS they will have the previous debt in the mortgage debt!!

This is the key do they stop adding to their debt. Mewing is a good idea if you have learnt your lesson i.e. take debt at 20% a year and reduce to 5% interest a year. Obviously you wouldn't want to be paying 5% for 25 years so if the extra mew bit can be paid off in 2 years without penalties then a good way of getting cheap credit.

However the amount of people that actually do this is probably extremely low. Credit now seems to fuel normal consumtion and people need to hit the crunch before they panic into changing their ways!!

Share this post


Link to post
Share on other sites

the bank of englands official Q4 05 MEW Data is released on the 4th of april :) cant wait, but we can use the exist data and this press release to show what it will look like....

Graph data until q3 05 ;p

First graph shows the amount in millions, as you can see 10billion will continue the MEW bounce (copying the MEW bounce we saw in the last crash)

second graph shows % of uk income that comes from people MEWing, again this latest figure of 10 billion shows the bounce in MEW continues...

Edited by moosetea

Share this post


Link to post
Share on other sites

http://portal.telegraph.co.uk/money/main.j.../ixcitytop.html

CARD DEBT PAID WITH MORTGAGES

Daily Telegraph

2nd March 2006

British debt has hit new heights as thousands of families remortgage their homes to escape crippling credit card repayments. The amount Britons owe to banks and building societies leaped to £10bn in January.
It means the total amount owed by Britons has increased to £1,168bn - comfortably above the country's annual economic output.
Ross Walker, UK economist at Royal Bank of Scotland, said: "This is the last thing the MPC wanted, as evidence builds of a new sort of 'liquidity trap' where lower interest rates apparently do little to stimulate the real economy, merely encouraging ever greater borrowing to further inflate existing asset prices.

Now we know why there was a jump in mortgage lending last month. When the houses are being used to pay short term debt with long term debt there is SERIOUS trouble. This looks like the last desperate gasp of Gordon "Miracle Economy" Brown's debt culture.

HPC 2006.

Also:

http://portal.telegraph.co.uk/money/main.j...M8&targetRule=1

Mortgage lending also defied the doomsters in January. The £9.2bn rise was the highest since April 2004.
This is an interesting place to be. Low interest rates are having the
undesirable effect
of inflating asset prices and swelling personal debt without bringing a more desirable stimulus to the real economy. No wonder the MPC is sitting on the fence.

Retail crashing and yet debt rising? A strange place to be indeed.

VIs admit that is where it's going:

http://property.scotsman.com/news.cfm?id=316442006

But relief may be still be on the way for hard-pressed retailers,
as strong mortgage lending and consumer credit should show through in higher spending in the high streets
in the coming months.

How many last gasps that now?

Share this post


Link to post
Share on other sites

Is it possible to do a quick and dirty calculation of quarterly growth figures (presumably negative) if MEW is 0? i.e. get a notional calculation of the size of the recession before job losses take effect?

Share this post


Link to post
Share on other sites

Funny thing is, people can move credit card debt into the mortgage, but can they fix their bad habits of using credit cards? I'm betting their credit cards will be up up n away within a year PLUS they will have the previous debt in the mortgage debt!!

The problem is that once you've cleared your cc debts by extending your mtg the process starts all over again i.e. back on the plastic. It's a bit like giving up smoking, people try to give it up, but then fall back into the habit. We've become a Nation of Debit addicts.

Share this post


Link to post
Share on other sites

Paying with plastic removes any assosiation with money. If you only ever have cash on you, its pretty impossible to over stretch yourself unless you go to a loan shark. And thats what CC companies are - loan sharks with a corporate image.

Share this post


Link to post
Share on other sites

Sounds like swapping short term debt for long term debt. How much more interest do you pay at 5% for 20 years than 20% for 5 years? £10k compounded at 5% for 20yrs is £26,500 but £10k over 5 years at 20% is £24.9k so not much difference really.

This could go on for a long time methinks.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 343 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.