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Guest Charlie The Tramp

Credit Action Debt Statistics

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Guest Charlie The Tramp

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

At the end of March 2006 the total UK personal debt was £1,182bn. The growth rate remains strong at 10.2% for the previous 12 months which equates to an increase of £100bn.

Total secured lending on homes in March 2006 was £990.8bn. This has increased 10.8% in the last 12 months.

Total consumer credit lending to individuals in March 2006 was £191.4bn. This has increased 7.5% in the last 12 months.

Servicing Debt: According to the Council of Mortgage Lenders (CML) total household debt has grown sharply as a percentage of disposable income over the past decade and currently stands close to 150%. At the end of 2005, the secured debt to income ratio was 121%, compared to 80% in 1995. And the unsecured debt to income ratio was 24%, almost double that of 10 years ago.

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Around 15 per cent of 18 to 24- year-olds think an individual savings account (ISA) is an iPod accessory, and one in 10 reckon it's an energy drink. With rising personal debt levels in Britain, and a lack of long-term savings, better money management seems a pressing issue.

That's just mad, as is the level of secured debt.

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At the end of March 2006 the total UK personal debt was £1,182bn. The growth rate remains strong at 10.2% for the previous 12 months which equates to an increase of £100bn.

I love the phraseology - "the growth rate (of debt) remained strong". So this is a really positive, economy-performance related statistic then ? Gooooo consumer! Spend spend spend... gotta keep that economy growing...

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I love the phraseology - "the growth rate (of debt) remained strong". So this is a really positive, economy-performance related statistic then ? Gooooo consumer! Spend spend spend... gotta keep that economy growing...

What intrigues me is the question of whether this is the fire that will ultimately see the end of our society as we have seen it up to now or the igniter fuel for a genuinely new way of managing an Economy.

Will only hindsight provide the answer and when?

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What intrigues me is the question of whether this is the fire that will ultimately see the end of our society as we have seen it up to now or the igniter fuel for a genuinely new way of managing an Economy.

Will only hindsight provide the answer and when?

I hate debt, and have avoided it like the plague. Nevertheless, I would be better off and have had a better life if I had embraced the concept of leverage. That was in the high inflation 80s and asset bull markets of the 90s of course. Will this be equally true in future? Perhaps not, but there is still nothing wrong with moderate debt based on time of life etc. Is this moderate debt? Doesn't sound like it, and the trend is worrying.

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I hate debt, and have avoided it like the plague. Nevertheless, I would be better off and have had a better life if I had embraced the concept of leverage. That was in the high inflation 80s and asset bull markets of the 90s of course. Will this be equally true in future? Perhaps not, but there is still nothing wrong with moderate debt based on time of life etc. Is this moderate debt? Doesn't sound like it, and the trend is worrying.

The problem with the figures, as has been discussed here before is that they don't give us the distribution of this debt.

If say only 20% are heavily indebted now that leaves plenty who might be pursuaded to increase their level of debt.

As often observed here there does seem to be an intense propaganda exercise at work trying to convince us all to borrow as much as possible.

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The debt in this country is out of control. Could you imagine if the debt growth slowed down to wage growth? We would be in a very bad recession. It is only this debt growth that is keeping economic growth positive.

The best analogy for this is a drug addict. They continue to need larger and larger amount of drugs to get their fix, yet if they come off it the consequences will be horrific. Yet if they keep taking drugs they will eventually die - the question is when!

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The debt in this country is out of control. Could you imagine if the debt growth slowed down to wage growth? We would be in a very bad recession. It is only this debt growth that is keeping economic growth positive.

The best analogy for this is a drug addict. They continue to need larger and larger amount of drugs to get their fix, yet if they come off it the consequences will be horrific. Yet if they keep taking drugs they will eventually die - the question is when!

I'm not disagreeing with your view but trying to think from the viewpoint of those who are running the show.

To use your analogy further though, drug addicts can survive for many years so long as they don't overdose.

Plus borrowing money is not illegal and can thus be pushed legitimately.

That new lending criterion "affordability" remember.

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The debt in this country is out of control. Could you imagine if the debt growth slowed down to wage growth? We would be in a very bad recession. It is only this debt growth that is keeping economic growth positive.

The best analogy for this is a drug addict. They continue to need larger and larger amount of drugs to get their fix, yet if they come off it the consequences will be horrific. Yet if they keep taking drugs they will eventually die - the question is when!

That would make the banks the evil drug pusher... ;)

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That would make the banks the evil drug pusher... ;)

And Kirsty Allcrap is the police office who comes in to schools to 'educate' you on drugs.

:o

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The problem with the figures, as has been discussed here before is that they don't give us the distribution of this debt.

If say only 20% are heavily indebted now that leaves plenty who might be pursuaded to increase their level of debt.

As often observed here there does seem to be an intense propaganda exercise at work trying to convince us all to borrow as much as possible.

Seen the BoE figures today? 300k loans for purchase or remortgage each month, split roughly 50/50. Given that's a bit below average then over the past three years while we've been in this debt bubble (yes, I know that's an opinion witha bearish bias) that's probably 12 million loans. Assuming that half the remortgages are moving to another deal that gives us 8 million loans. That's one third of households potentially exposed to the debt bubble.

Lots of assumptions and a bearish bias, but pretty shocking all the same.

T&T

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Seen the BoE figures today? 300k loans for purchase or remortgage each month, split roughly 50/50. Given that's a bit below average then over the past three years while we've been in this debt bubble (yes, I know that's an opinion witha bearish bias) that's probably 12 million loans. Assuming that half the remortgages are moving to another deal that gives us 8 million loans. That's one third of households potentially exposed to the debt bubble.

Lots of assumptions and a bearish bias, but pretty shocking all the same.

T&T

Even those rough calculations leave a majority with the abliity to borrow more. I realise there are those who may have incomes so low that their scope is limited, except we have had some horror stories there.

I'm just wondering whether the vast marketing effort could ever persuade the likes of me to indulge in "to the edge" borrowing.

Casting aside "Green" concerns, generally growth is seen as good, for individuals and a country.

It would appear that if higher debt levels, individual and Government, are the means to that then that is what will be encouraged.

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So net lending secured on dwellings is up 10.8% yoy, and the Halifax are saying house prices are up 8% yoy.

Doesn't paint a rosy picture of the past year when this deficit is less than GDP for the same period, 2.2% wasn't it?

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so, to summarise, the price I pay for not diving into the hot tub of sexy indebtedness?

I don't get to "own" a house (i.e. mortgage) - but I still get to live in one.

I don't pay a portion of my income to a lender in exchange for goods whose utility has already been exhausted.

where did I go wrong?

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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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