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Debt To "soar" By End Of Year - Insolvencies To Break 112k

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http://www.thisismoney.co.uk/credit-and-lo...mp;in_page_id=9

Debt set to soar by the end of 2007

Philip Scott, This is Money
4 August 2007
Individual insolvencies are
set to soar
by the end of the 2007, as the UK struggles with more than £1.3 trillion of personal debt.
..../
Research from uSwitch, a comparison site, estimates that the number of individual insolvencies are set to rocket to 112,588 by the end of the year, an increase of more than 5% on the whole of 2006.
The average household debt in Britain is increasing by £13 a day, with the average amount of debt per household standing at £8,841 or £55,567, including mortgages

The perfect storm is forming on the horizon:

1. Debt continues to rise

2. Credit is drying up

3. HPI is slowing with the escape valve of MEW closing down

4. Wages are stagnating as GDP slows which in turn threatens job security

5. IR show no sign of decreasing as credit risks grow

It would seem to be all downhill from now on.

Edited by Realistbear

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Guest Charlie The Tramp
Those who depend on their wealth will fall like the leaves of Autumn; but the righteous will prosper like the leaves of summer” - Proverbs 11:28

Never happened in the past and will never happen in the future. ;)

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Something I read in an article in the news blog during the week, really hit home to me.

It said homeowners will not be able to sell their way out of trouble.

Which is very significant, if I for example have been foolish and bought a house at a very high price, struggle to

pay the mortgage and fall behind with payments, I have to find someone who is willing to take this liability

off my hands for at least what I paid for it. However since I bought it interest rates have gone up, credit is tighter, sentiment has changed and I cant find anyone to buy it. I either sell at 20% BMV to a sell and rent back firm, if they will take it, or get reposessed and it sells for whatever at an auction.

All very obvious, but the full meaning has only just sunk in.

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Guest wrongmove
Never happened in the past and will never happen in the future. ;)

:lol::lol::lol:

Indeed.

And as for the self-righteous.........

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Guest vicmac64
http://www.thisismoney.co.uk/credit-and-lo...mp;in_page_id=9

Debt set to soar by the end of 2007

Philip Scott, This is Money
4 August 2007
Individual insolvencies are
set to soar
by the end of the 2007, as the UK struggles with more than £1.3 trillion of personal debt.
..../
Research from uSwitch, a comparison site, estimates that the number of individual insolvencies are set to rocket to 112,588 by the end of the year, an increase of more than 5% on the whole of 2006.
The average household debt in Britain is increasing by £13 a day, with the average amount of debt per household standing at £8,841 or £55,567, including mortgages

The perfect storm is forming on the horizon:

1. Debt continues to rise

2. Credit is drying up

3. HPI is slowing with the escape valve of MEW closing down

4. Wages are stagnating as GDP slows which in turn threatens job security

5. IR show no sign of decreasing as credit risks grow

It would seem to be all downhill from now on.

I agree - also marry it with China buying UK and US businesses and banks - the world is changing fast and our freedoms will soon be no more.

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Something I read in an article in the news blog during the week, really hit home to me.

It said homeowners will not be able to sell their way out of trouble.

Which is very significant, if I for example have been foolish and bought a house at a very high price, struggle to

pay the mortgage and fall behind with payments, I have to find someone who is willing to take this liability

off my hands for at least what I paid for it. However since I bought it interest rates have gone up, credit is tighter, sentiment has changed and I cant find anyone to buy it. I either sell at 20% BMV to a sell and rent back firm, if they will take it, or get reposessed and it sells for whatever at an auction.

All very obvious, but the full meaning has only just sunk in.

Cannot afford to pay mortgage ,cannot sell property.

A lot of people will be in this position soon with property,The ones who bought a the top of HPI (Last nine months or so) will not have many options,they can put up for sale now and hope someone will buy at present high prices (going to get tougher) or they can give in and give keys in to the lender and hope that the lender will not come back for to much when the property is sold.

If you have property and have owned if for a few years and there is at least 30% equity in the value of the property it may be a better option to go to a sell and rent back company as in this situation you will have more control of the sale of your property,and will still have a roof over your head,If on the other hand it is reprocessed and the lender sells the house you have to wait for the lender to sell the property and then the lender will firstly take out the outstanding mortgage then secondly will take any costs out of the remaining equity for the sale and any other expences, so you may possibly not get anymore by going this direction compared with the sell to rent option.

People have to seek help on which is the best option for them when they get in position.

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BMV, I presume, is below market value. But market value is what someone is prepared to pay, and if they are not prepared to pay very much the market goes down. In a 'thin' market Value can go down quite sharply. I think it is becoming clear that result of this is that the markets could well fall very sharply if there are few buyers. We will call it a House Price Crash then.

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Guest wrongmove
BMV, I presume, is below market value. But market value is what someone is prepared to pay, and if they are not prepared to pay very much the market goes down. In a 'thin' market Value can go down quite sharply. I think it is becoming clear that result of this is that the markets could well fall very sharply if there are few buyers. We will call it a House Price Crash then.

Market value is what people are prepared to pay through the usual channels and processes.

That is, with several months of waiting for offers, and several more months of sorting out chains, raising mortgages etc.

If you want cash tomorrow, you will get less money. This is known as BMV.

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In a 'thin' market Value can go down quite sharply. I think it is becoming clear that result of this is that the markets could well fall very sharply if there are few buyers. We will call it a House Price Crash then.

Absolutely. If you need proof of that just look at the gold market on days central banks dump physical.

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The crash will only really get going when people are forced to accept lower offers on their property by the imperative to sell, such as the fear of looming reposession. Or in the case of BTLers, the fear of no more capital growth. Or the fear of looming reposession!

Until they need to sell, people will just sit tight. So there will be no fall in prices.

I think we are now looking at a period of stagnation of several months before the slide starts.

Of course the media will start talking about it as a 'soft landing'...

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Cannot afford to pay mortgage ,cannot sell property.

A lot of people will be in this position soon with property,The ones who bought a the top of HPI (Last nine months or so) will not have many options,they can put up for sale now and hope someone will buy at present high prices (going to get tougher) or they can give in and give keys in to the lender and hope that the lender will not come back for to much when the property is sold.

If you have property and have owned if for a few years and there is at least 30% equity in the value of the property it may be a better option to go to a sell and rent back company as in this situation you will have more control of the sale of your property,and will still have a roof over your head,If on the other hand it is reprocessed and the lender sells the house you have to wait for the lender to sell the property and then the lender will firstly take out the outstanding mortgage then secondly will take any costs out of the remaining equity for the sale and any other expences, so you may possibly not get anymore by going this direction compared with the sell to rent option.

People have to seek help on which is the best option for them when they get in position.

Not just the ones who bought at the top. It's also the people who have bought years ago, but have borrowed against the perceived rise in value and spent the money on decking, 4x4s, holidays and whatever. They will suffer equally.

What is really frightening about the coming correction is the 'number of people under curve'. With such a long boom (previous booms seemed to blow out in months or a year or two at most). There are a lot of people who have bought near the top, borrowing to do so; or who have taken out second mortgages (MEWed) to fund an inappropriate lifestyle on the money 'they have made' from property.

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With such a long boom (previous booms seemed to blow out in months or a year or two at most). There are a lot of people who have bought near the top, borrowing to do so; or who have taken out second mortgages (MEWed) to fund an inappropriate lifestyle on the money 'they have made' from property.

Your comments on the short time span of previous booms look wrong to me. The graph at the start of this site shows you that prices have been "booming" (i assume you mean growth over trend) for over 10 years.

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Not just the ones who bought at the top. It's also the people who have bought years ago, but have borrowed against the perceived rise in value and spent the money on decking, 4x4s, holidays and whatever. They will suffer equally.

What is really frightening about the coming correction is the 'number of people under curve'. With such a long boom (previous booms seemed to blow out in months or a year or two at most). There are a lot of people who have bought near the top, borrowing to do so; or who have taken out second mortgages (MEWed) to fund an inappropriate lifestyle on the money 'they have made' from property.

I agree with what you say Redwing, i was just making an example with a pure mortgage.

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I am one of those who bought and SOLD in the last 9 months and i really do want to sell...i put 10% down as deposit ...im 23 years old and dont want to be a debt slave rest of my life..BUT i have one problem...i recieved my settlement figure from my mortgage Co ( im on a 2yr tracker) and to end early they want £6000, which means im lucky if i walk away with my 10% deposit..after EA fees etc i may walk away with 8k if im lucky.... i do really want to sell and rent but just cant bring my self to accept and allow them to have 6k of my money :( the only little gud thing out of this is that in 16 months im out of my 2year deal with them.......what im asking is would you sell now and atleast walk away with 8k instead of 14k or stay til deal ends and sell for prob just the same but saving the 6k?

TBH i can now see why so many people feel trapped during time of HPC's and commit suicide....I am so stressed....im 23 years old and cant remember the last time i went out after getting paid and treating myself to some new clothes or a decent holiday like other young people who work all friggin week...

I rushed into buying at 18 and i now realise after 5 years it aint great having a big debt around your neck ! ! i just wish other young people would realise this instead of envying me ! !

Edited by nat172

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I am one of those who bought and SOLD in the last 9 months and i really do want to sell...

I rushed into buying at 18 and i now realise after 5 years ...

So you have NOT sold during the last 9 months. But you bought 5 years ago, not 9 months ago. Just got confused, sorry.

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TBH i can now see why so many people feel trapped during time of HPC's and commit suicide....I am so stressed....im 23 years old and cant remember the last time i went out after getting paid and treating myself to some new clothes or a decent holiday like other young people who work all friggin week...

I rushed into buying at 18 and i now realise after 5 years it aint great having a big debt around your neck ! ! i just wish other young people would realise this instead of envying me ! !

Can you maybe try to let out a room for the remaining 16 months of the deal to help have a little more disposable income, then at least you may feel a bit less under stress.

You can then put it on the market and not lose the 6k, hopefully things will pan out for you. Good luck anyway and don't let it all get you down. Some of us here have been in dire straights and we survived.

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So you have NOT sold during the last 9 months. But you bought 5 years ago, not 9 months ago. Just got confused, sorry.

no i bought my 1st property at 18 a few years later we split and having sold the propertyi also bought this one im currantly in around 6 months ago. totally regret it now but mortgage Co got me hook line and sinker.. im gonna get estate agents in to value i dont want to lose the 6k i just cant help but think if i dont get out now i will be stuck with the rush of other people in the same position trying to sell their homes too.

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no i bought my 1st property at 18 a few years later we split and having sold the propertyi also bought this one im currantly in around 6 months ago. totally regret it now but mortgage Co got me hook line and sinker.. im gonna get estate agents in to value i dont want to lose the 6k i just cant help but think if i dont get out now i will be stuck with the rush of other people in the same position trying to sell their homes too.

I think the key thing for you to do will be to better take a smaller hit sooner than a larger hit later (when waiting for a better price in a falling market). However, better don't listen to me since I've never owned property so I am no expert at all when it comes to sales.

Edited by Goldfinger

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