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Guest Charlie The Tramp

Credit Action Stats Updated March 2006

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Guest Charlie The Tramp

Credit Action

Total secured lending on homes in January 2006 was £974.6bn. This has increased 10.6% in the last 12 months.
Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,144 per average UK adult at the end of January 2006. This has grown 52% in 5 years.
According to the BBA the proportion of credit card balances bearing interest was 75.4% in December 2005.
More than 20 million Britons are in debt, according to a survey by Mintel that reveals the extent of the country's "spend now, pay later" lifestyle. It says the nation is gripped by a borrowing culture, with the vast majority of those in debt showing no concern about the amount they owe.

Any bets on a massive surge in personal bankruptcies this year. <_<

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Guest boredwaiting

More than 20 million Britons are in debt, according to a survey by Mintel that reveals the extent of the country's "spend now, pay later" lifestyle. It says the nation is gripped by a borrowing culture, with the vast majority of those in debt showing no concern about the amount they owe.

Does this include mortgages? If so it's less than a third of the population which doesn't seem that bad as a big proportion of this would be the mortgages. If it's just credit cards and loans then woah!!!!

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Does this include mortgages? If so it's less than a third of the population which doesn't seem that bad as a big proportion of this would be the mortgages. If it's just credit cards and loans then woah!!!!

third of the population maybe, but remember, a large proportion of the population are OAPs and kids.

So its significantly big for percentage of working population!

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What rarely seems to get commented on is the spread of debt levels.

Also you don't see much data on how many of those with debt are struggling.

1) If 10% of those with debts have 90% of the debt then that is very worrying.

2) But if it was perfectly evenly distributed (ie. £4-5K per head) then it wouldn't be much of a cause for concern.

I suspect its somewhere nearer option 1).

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I suspect that these stats include me among the number of debtors - although the balance on my recently acquired 0% credit card is more than offset by the savings accumulating elsewhere.

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I don't believe this "I don't care" statistic. I have been in debt and I used ti say I dont care, what I really meant was, "Oh my God, How the hell am I going to get my self out of this mess. Oh well, as least x,y and z are in x debt, my debts only y bigger." It's ********.

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I don't believe this "I don't care" statistic. I have been in debt and I used ti say I dont care, what I really meant was, "Oh my God, How the hell am I going to get my self out of this mess. Oh well, as least x,y and z are in x debt, my debts only y bigger." It's ********.

Couldn't agree more. The feeling of relief when you're totally debt free is quite intoxicating after the stress of having debts hanging around your neck.

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I think that these days the worry of job losses, house price crashes et al are enough to worry about without needing to worry about debt too!

Debt is something that should return to being an option of last resort, and only used when you have an eventual plan to get back out of debt. How many people these days MANAGE their debts.... re-financing/re-mortgaging is not managing your debt.

Whenever I have taken out loans etc I have always had a fixed horizon within which I would be debt free again. My maximum has always been 3 years. If I wasn't going to be debt free again within 3 years, with reasonable repayments (easily comfortable) then I would get worried (in truth I didn't even like that level of debt).

Whatever happened to saving up to buy things?

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Guest Charlie The Tramp

I don't believe this "I don't care" statistic. I have been in debt and I used ti say I dont care, what I really meant was, "Oh my God, How the hell am I going to get my self out of this mess. Oh well, as least x,y and z are in x debt, my debts only y bigger." It's ********.

Yes, but was the new Enterprise Act in force when you were in debt. My accountant who is also an Insolvency Practioner told me months back he gets annoyed when clients sit in his office with a smile on their face and treat it as a joke. They even know after a year they will be discharged before he has even explained the bankruptcy rules to them. As he said to me quite bluntly bring in a p**s taking act and very soon they will be taking the p**s out of it.

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As he said to me quite bluntly bring in a p**s taking act and very soon they will be taking the p**s out of it.

Surely it can only be a matter of time before the banks respond to this by tightening their lending criteria. Once they've been burnt with bad debt and properly adjusted to the new reality it would seem reasonable to assume this is a one time effect. Or perhaps not!

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Guest Charlie The Tramp

Surely it can only be a matter of time before the banks respond to this by tightening their lending criteria. Once they've been burnt with bad debt and properly adjusted to the new reality it would seem reasonable to assume this is a one time effect. Or perhaps not!

Well just look at the daily petition list alone for the Central Bankruptcy Court in London today. This is the longest list I have seen so far since monitoring the past couple of months.

Central London Bankruptcy Court

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As he said to me quite bluntly bring in a p**s taking act and very soon they will be taking the p**s out of it.

LOL. Very true. :lol::lol::lol::lol::lol::lol:

I wonder if a massive number of repossessions would lead the government to meddle with that too.

The government dosen't have masses of social housing available for the legions of bankrupts and repossessed people who will be coming their way.

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Whatever happened to saving up to buy things?

Welcome to 2006 the decade we're encouraged not too!

I mean if we paid in cash for something then only the purchaser and seller benifit.

If we HP or borrow in some other fashion i.e. MEW, Credit Card etc. then we create wealth buy paying interest into the banking sector and allowing the banks to lend more based on our debts.

It's a wonderful counter-intuitive cycle where things cost more so that the big finance companies make billions from your small purchases and the economy looks healthier - but actually isn't because the real costs to people has risen but is masked by the interest they are now paying in order to run up their debts.

I read that on average most people spend 1 or 2 months per year paying off interest on debts - this is a good thing because they are now productive consumers... paying for the banking fatcat holidays and fancy cars, whilst those same people remind us how borrowing helps the economy.

We are all equal - but some are more equal than others.

Big brother is also watching YOU!

- Pye (Property Speculation Ninja :ph34r: )

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Guest Charlie The Tramp

I phoned a mate of mine for some info this afternoon. He runs his own well established credit brokerage in South London and says most of his business now is for secured loans and remortgages for debt consolidation purposes. Just phoned me back to say he has been enquiring with other Brokers regarding consolidation purpose loans and they are showing the same as himself. One client he has just dealt with was 15 years into his mortgage had 80k debts and remortgaged to clear those debts taking out a fresh 25 year mortgage and believes he will be seeing more of this the coming year.

He says in his opinion that the debt issue is now becoming very serious and many shocking statistics will be seen in the latter part of this year. Many clients he deals with already have multi charges on their Registers and are trying to milk the last bit of equity from their property. Just watch the volume of TV advertising for consolidation loans he said that is the best indicator of how bad things are, as these companies must earn massive commissions to pay for it.

Debt problem, what debt problem ?

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Guest Winners and Losers

Today my bank offered me a credit card. 0% interest on balance transfers for 9 months and 4.9% for the life of the balance transfer thereafter. Nothing unusual I hear you say. Funny thing is that, being newly returned to the UK from abroad, 6 months ago I could not even get a bank account, let alone a credit card. It doesnt take them long does it?

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Couldn't agree more. The feeling of relief when you're totally debt free is quite intoxicating after the stress of having debts hanging around your neck.

Damn, I wish I had built up huge debts in the past. Being totally debt free now, I would then be benefitting from that huge relief rush that you mentioned. NOT FAIR!

frugalista

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Charlie,

I put up a thread when the BoE lending stats came out on Wednesday, but it went straight off the board (yeah, I know I'm a boring git).

Anyway, I said:

If there's one statistic I would recommend HPCers keep their eyes on, it's the monthly net lending growth figure.

Bubble markets require an ever growing input of speculative funds. At first this liquidity produces large nominal gains in prices, but as time goes on, each subsequent injection of 'investment' produces diminishing gains. Eventually new funds are required simply to keep prices at a plateau, until finally the rate of liquidity growth starts to fall, leaving an increasingly unsupported market.

Note that over the past few months the rate of unsecured credit growth has begun to trend downwards, and consumer spending has been soft as a result. Meanwhile, even though secured lending growth has been extremely robust, house prices have only been able to tread water (and are probably falling).

The key moment will be when the rate of growth of secured lending starts to fall. That's when house prices will come under severe pressure.

And for a brief explanation, I put:

Just to emphasize why this is the case, when a bull market begins there is a limited supply of shares, houses, or tulip bulbs. All the extra liquidity chases prices up rapidly.

Soon however the speculative fervour prompts new issues - in the tech boom it was Internet companies with barely more than a business plan, in the UK housing market it's tens of thousands of new build flats.

Soon new supply balances new investment, and prices plateau. Finally when the liquidity tap is turned off there is a huge overhang of supply, and the holders try to sell before everyone else does. Prices can collapse very rapidly.

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Guest Charlie The Tramp

Households owe £2.6bn

SPIRALLING household bills will hit consumers in the pocket to the tune of £2.6bn this year - equivalent to nearly a penny on income tax, new research shows.
Today's report will worry Chancellor Gordon Brown, who is banking on a pick-up in consumer spending to give the economy a boost and get his growth forecasts on track.

Government debt service launched

Sutcliffe added: 'This initiative complements the £45m committed to creating a step change in face-to-face debt advice. It will make a huge difference to those who are in most need of support.'

New hope for debt victims

THE Government is set to unveil plans that will make it easier for consumers to take out Individual Voluntary Arrangements - the debt-laden's alternative to bankruptcy.

Under plans currently being rubber stamped, a 'Simple IVA' will be introduced later this year that will help speed up the application process and allow more people to apply for the debt repayment programme.

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Damn, I wish I had built up huge debts in the past. Being totally debt free now, I would then be benefitting from that huge relief rush that you mentioned. NOT FAIR!

frugalista

:lol: very good - I like a bit of sarcasm in the morning.

Being in debt is something I would not encourage, believe me.

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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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