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OnlyMe

A Trillion Pound Success Story

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A vomit-inducing self-congratualtory pat on the back on how the CML and its coterie of lenders have created the largest debt burden the population has ever seen.

The story is the same as ever, debt is bulging at the seams but nothing bad has happened yet so no problem.

http://www.cml.org.uk/cml/filegrab/06-2006...n1.pdf?ref=4768

Edited by OnlyMe

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Guest grumpy-old-man

A vomit-inducing self-congratualtory pat on the back on how the CML and it coterie of lenders have created the largest debt burden the population has ever seen.

The story is the same as ever, debt is bulging at the seams but nothing bad has happened yet so no problem.

http://www.cml.org.uk/cml/filegrab/06-2006...n1.pdf?ref=4768

I like the bottom of page 9:

CML Ar4e Covered Future Prospects:

As previous sections make clear, there are a don’t say we didn’t warn you few signs that the UK is reaching a natural limit to the value of outstanding mortgage debt or that problems of sustainability or other structural weaknesses are exposed.

Unless the economy suffers from a massive HPI, high unemployment, higher IR’s and war with Iran major adverse shock….bla..bla….bla then everything will be rosy

:ph34r:

Edited by grumpy-old-man

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This report is really worth reading in full. It raises a lot of questions (more than it answers). Basically, it is a bit of puff for the CML to reassure lenders that they are in a healthy market.

Some assumptions in the report I think dubious are:

1. that home ownership as a tenure form is going to increase. It currently stands at 70% of dwellings and they say the government is intent on increasing this to 75% by 2010. Here are some international comparisons on tenure from This Source, 2000.

Home ownership as % of tenure

Australia 70.06

Austria 44.32

Belgium 65.58

Canada 62.81

Finland 72.19

France 57.10

Germany 42.81

Italy 62.91

Luxembourg 66.60

Netherlands 47.57

Spain 74.33

Sweden 54.42

United Kingdom 68.56

United States 67.15

As you can see the UK is near the top of the list just behind Spain, Finland and Australia. I'd think that 75% is the absolute tops. There will always be a proportion of households who either cannot or do not want to own. At 70% currently, I'd say we're pretty close to full maturity in the growth of home ownership.

2. Home ownership makes you better at home finance.

Results from the FSA’s recent financial capability baseline survey indicate that home-owners, both those that own outright and those with a mortgage, tend to do better when it comes to making ends meet compared to other types of tenure. Home-owners also appear better able to plan ahead (FSA baseline survey, 2006).
and more on page 7.

This is a bit like saying the wind is made by the trees waving their branches about. Perhaps being good at home financial planning is a pre-requisite for home ownership. I can't see how home ownership per se is going to make you better at managing your finances.

3. Housing assets

Table 3 on page 8 shows the value of homes owned (including debt) and % of the UK's total household wealth (incl. savings, pension investments etc)

year Value of assets % of gross wealth

1989 £1.2tr 45%

1994 £1.1tr 36%

1999 £1.7tr 33%

2004 £3.2tr 46%

It looks like we are back where we were in 1989. Can someone remind me what happened next?

4. the outlook for lending

Indeed, our latest forecasts suggest that outstanding mortgage debt will exceed £1.1 trillion before the end of 2007.

You hope!

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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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