Dicky Posted March 20, 2005 Share Posted March 20, 2005 http://news.bbc.co.uk/1/hi/business/4366225.stm "A downturn in the economy would create serious economic and social problems for the 15 million people who struggle with debt repayments." "Debt is a time bomb which could be triggered by any number of shocks to the economy." I think IR going from 3.5 to 4.75% have caused that already cause the shock factor, just look at new mortgage approvals, consumer spending and new car sales. By the summer we'll see unemployment ramping up, I think Gordan's already planned his escape route. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted March 20, 2005 Share Posted March 20, 2005 I think he wanted the World Bank. Quote Link to comment Share on other sites More sharing options...
Warwickshire Lad Posted March 20, 2005 Share Posted March 20, 2005 By the summer we'll see unemployment ramping up, I think Gordan's already planned his escape route.<{POST_SNAPBACK}> I was just about to post this link and you beat me to it .... however it usefully confirms pretty much what we already know. Privately, Gordon Brown must totally know what's going on with regards to personal debt. He has to. Presumably Blair must as well. I can't help feeling that after many years of "good times", that some sort of economic shock is around the corner. Look at the rumblings with the oil price... looks a bt ominous to me. Gordon Brown goes on about stability to the nation as if it's something he's totally responsible for creating and that whilst he's in charge everything's going to be OK ... well he would say that wouldn't he. Quote Link to comment Share on other sites More sharing options...
observant andy Posted March 20, 2005 Share Posted March 20, 2005 I remember reading a letter in the Financial Times about three years ago about this womens concerns about the amount of consumer debt which had been accumulated this at the time was 868Billion she was going on that if this continued then it would have disastrous consequences for the economy due to this debt timebomb. This is when I became interested in this large debt since then I have seen in disbelief this amount pass the 1 trillion mark and now nearing 1.1 trillion. I remember also a few years ago after the dotcom boom the government ,media urging the consumer to spend near christmas to avoid recession. Well the consumer certainly took the advice but got such an apetite for it with all the cheap credit about they couldnt stop like a druggy cant when he takes his first hit. We have certainly got problems ahead the consumer at some point needs to pay it back this gives a double whammy to the economy if they dont spend because they are paying back their debt companies dont make profits and lay people off, and if people are not employed they cant afford their bills if this happens they have to sell their assets one of them being an house. Great for the Bears on this forum because a flood of property on the market which NEEDS TO BE SOLD is when they seriously have to drop prices to even attract the interest of buyers. An HPC is the obvious outcome when you look at the debt problem objectively Quote Link to comment Share on other sites More sharing options...
laurejon Posted March 20, 2005 Share Posted March 20, 2005 I think the biggest debt outstanding is credit card, store cards, and car loans. And these debts are the domain of the non houseowner. Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder. Many FTB'ers are having problems simply because they are laden with huge credit card, and car loan debts before they have even started. I was talking to a couple of potential FTB'ers the other night. They are looking to buy, have saved 5K for a deposit, and have 25K outstanding jointly in student related, and credit card debts. So the debt crisis I think is falling on those who have not commited to buy a property and have thrown caution to the wind and gone on a spending spree. Quote Link to comment Share on other sites More sharing options...
Guest consa Posted March 20, 2005 Share Posted March 20, 2005 I think the biggest debt outstanding is credit card, store cards, and car loans.And these debts are the domain of the non houseowner. Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder. Many FTB'ers are having problems simply because they are laden with huge credit card, and car loan debts before they have even started. I was talking to a couple of potential FTB'ers the other night. They are looking to buy, have saved 5K for a deposit, and have 25K outstanding jointly in student related, and credit card debts. So the debt crisis I think is falling on those who have not commited to buy a property and have thrown caution to the wind and gone on a spending spree. <{POST_SNAPBACK}> Quote Link to comment Share on other sites More sharing options...
Nomadd Posted March 20, 2005 Share Posted March 20, 2005 I think the biggest debt outstanding is credit card, store cards, and car loans.And these debts are the domain of the non houseowner. Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder. Many FTB'ers are having problems simply because they are laden with huge credit card, and car loan debts before they have even started. I was talking to a couple of potential FTB'ers the other night. They are looking to buy, have saved 5K for a deposit, and have 25K outstanding jointly in student related, and credit card debts. So the debt crisis I think is falling on those who have not commited to buy a property and have thrown caution to the wind and gone on a spending spree. <{POST_SNAPBACK}> Sure, there are those people who have accumulated lots of debt 'elsewhere'. But to seriously suggest that that is the reason FTBs struggle is nonsense. As are statements such as 'Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder'. These comments are so daft, in fact, I'm thinking you are just trolling once again... Average house prices in many areas now are 10-12 times local earnings. It doesn't matter even if you haven't got *any* debt elsewhere, you still can't afford property at those crazy multiples. And it's the greedy 'house owners' who've driven these price rises, not FTB's. I'm in my 40's, and most people I know are home owners, and most of them have a mountain of debt; and on top of that, they believe simple MEWing will solve all their problems - because house prices NEVER GO DOWN. Oh, and they also forget that you have to meet the mortgage payments every month - for years - if you are going to get your money back - peak-to-trough - in any market, and that includes housing. You have some good posts, laurejon, many of which I agree with. This just isn't one of them. You need to get out more - you'll soon meet plenty of 'imprudent house owners'. Nomadd Quote Link to comment Share on other sites More sharing options...
Guest consa Posted March 20, 2005 Share Posted March 20, 2005 61%MEW Quote Link to comment Share on other sites More sharing options...
observant andy Posted March 20, 2005 Share Posted March 20, 2005 I think the biggest debt outstanding is credit card, store cards, and car loans.And these debts are the domain of the non houseowner. Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder. Many FTB'ers are having problems simply because they are laden with huge credit card, and car loan debts before they have even started. I was talking to a couple of potential FTB'ers the other night. They are looking to buy, have saved 5K for a deposit, and have 25K outstanding jointly in student related, and credit card debts. So the debt crisis I think is falling on those who have not commited to buy a property and have thrown caution to the wind and gone on a spending spree. <{POST_SNAPBACK}> I agree with some of what you say a large amount of people across the spectrum have got themselves in alot of debt. However to say that all houseowners are prudent is a generalisation because some have tried getting on the ladder by self certification mortgage and some by overstretching themselves because they have worked out how much they can afford at historical low interest rates but have had no inclination that interest rates go up sometimes dramatically. Other people are the amateur BTL these are the most stupid of people because they dont know the difference between a current asset and fixed asset and you are only rich when you sell your fixed asset and turn it into a current asset. They borrow money based on the fact that houses have risen so much they MEW hence getting themselves in more debt. This sort of person will start the crash because most of them will wake up to the fact their asset is depreciating and they are losing money because their interest repayments are more than what they are receiving in rent it will only be a matter of time before the penny drops that they have to sell. Quote Link to comment Share on other sites More sharing options...
Dunks Posted March 20, 2005 Share Posted March 20, 2005 And these debts are the domain of the non houseowner. Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder.Many FTB'ers are having problems simply because they are laden with huge credit card, and car loan debts before they have even started. I don't think this is the case. My SO and myself have no outstanding debts, we rent and are currently saving an increasing amount for a house when they come back down to reasonable levels (yes, wannabe FTB's). I know quite a few others in a similar situation, both friends and relations. Whereas several people who own property have MEWed and either bought expensive consumer items such as large televisions, or gone on expensive holidays. In fact, an ex-collegue of mine owned two properties and permanently lived on his overdraught and credit cards (taking money out on one to pay off the others). He also drove around in a very expensive german car. Prudent? I *don't* think so. Quote Link to comment Share on other sites More sharing options...
Culpability Brown Posted March 20, 2005 Share Posted March 20, 2005 I think the biggest debt outstanding is credit card, store cards, and car loans.And these debts are the domain of the non houseowner. Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder. <{POST_SNAPBACK}> Don't talk B****cks Laurejon. You been on the wine this lunch time? It's the young, professional and educated who have decided, for themselves, that now is a ludicrously stupid time to participate in an overspeculated, washed out property bubble. Can you genuinely not see that there's a huge debt problem. Couple this with an oversupply of overpriced property (especially as regards appartment complexes), cost of living expenses and interest rates on the up and what have you got? A mess! Quote Link to comment Share on other sites More sharing options...
laurejon Posted March 20, 2005 Share Posted March 20, 2005 There are always the odd few examples, and maybe my age group is such that we have learnt the lessons of the last crash and have not MEWED at all. In any downturn Cash is King, and you can go under for less than last months electric bill. MEW has been a problem, but most MEW's are from the newcomers in the last few years who have never understood the mechanics of the economy. Its all paper money and its not yours for real till the fat lady sings. I get to meet an enourmous number of Grads in my job, and all of them are carrying around a huge burden of debt. Given that 60% of the young population are grads, with more to come then how on earth are they ever going to get started with life. To leave Uni now today, owing less than 15K is considered a fiscal miracle. 25K is becoming the norm, and given that they are most likely to bond with their peer group in relationships then thats a joint 50K of debt burden. When leaving Uni its a CAR, then some nice clothes, and some good few years of nights out and the credit card gets a whack taking their joint debts to 60K in no time at all. I am fully sympathetic to the plight of FTB'ers, but I dont think the problem is isolated to just, "Prices are too high". There are a huge number of other factors to be taken into account. Quote Link to comment Share on other sites More sharing options...
Guest consa Posted March 20, 2005 Share Posted March 20, 2005 There are always the odd few examples, and maybe my age group is such that we have learnt the lessons of the last crash and have not MEWED at all.In any downturn Cash is King, and you can go under for less than last months electric bill. MEW has been a problem, but most MEW's are from the newcomers in the last few years who have never understood the mechanics of the economy. Its all paper money and its not yours for real till the fat lady sings. I get to meet an enourmous number of Grads in my job, and all of them are carrying around a huge burden of debt. Given that 60% of the young population are grads, with more to come then how on earth are they ever going to get started with life. To leave Uni now today, owing less than 15K is considered a fiscal miracle. 25K is becoming the norm, and given that they are most likely to bond with their peer group in relationships then thats a joint 50K of debt burden. When leaving Uni its a CAR, then some nice clothes, and some good few years of nights out and the credit card gets a whack taking their joint debts to 60K in no time at all. I am fully sympathetic to the plight of FTB'ers, but I dont think the problem is isolated to just, "Prices are too high". There are a huge number of other factors to be taken into account. <{POST_SNAPBACK}> So we are looking for a crash + 50K on ftb property Quote Link to comment Share on other sites More sharing options...
Flick Posted March 20, 2005 Share Posted March 20, 2005 And these debts are the domain of the non houseowner. Most house owners are prudent with their finances, hence the reason they managed to get onto the ladder.Many FTB'ers are having problems simply because they are laden with huge credit card, and car loan debts before they have even started. Do you actually believe the stuff you write? or are you just trying to wind people up? Quote Link to comment Share on other sites More sharing options...
tiff Posted March 20, 2005 Share Posted March 20, 2005 I also agree in the sense that Gordon and Tony are fully aware of the situation. But you don't win elections by looking at the negative. Quote Link to comment Share on other sites More sharing options...
Nomadd Posted March 20, 2005 Share Posted March 20, 2005 I am fully sympathetic to the plight of FTB'ers, but I dont think the problem is isolated to just, "Prices are too high". There are a huge number of other factors to be taken into account. Absolutely. But that wasn't the way you phrased it in your first post. Nice to see you've corrected your error now. I think there's also a flip-side to the argument, which is simply that many young people are forced into so much debt - i.e. student loans, hyper living costs, etc. that they think 'sod it, I can't ever afford a house, so I'll spend all my money elsewhere...' I know lots of young people in this position, and that doesn't bode well for the housing market over the coming years - and we already have too few FTBs. It's the 'can't pay, won't pay' attitude of the younger generation that will drive the housing market over the next 5-10 years, and I think current older generation homeowners are in for a rude awakening. I mean, just put yourself in the shoes of a young grad. with 15k of debt and houses costing 20 times what you earn - would you throw your entire youth away working your balls off for a pile of bricks in the UK? Nope, me niether. Nomadd Quote Link to comment Share on other sites More sharing options...
Culpability Brown Posted March 20, 2005 Share Posted March 20, 2005 ..............but I dont think the problem is isolated to just, "Prices are too high". There are a huge number of other factors to be taken into account.<{POST_SNAPBACK}> Yes, and virtually all of the other factors are negative for the property bubble. Quote Link to comment Share on other sites More sharing options...
Guest The dude Posted March 20, 2005 Share Posted March 20, 2005 Absolutely. But that wasn't the way you phrased it in your first post. Nice to see you've corrected your error now. I think there's also a flip-side to the argument, which is simply that many young people are forced into so much debt - i.e. student loans, hyper living costs, etc. that they think 'sod it, I can't ever afford a house, so I'll spend all my money elsewhere...' I know lots of young people in this position, and that doesn't bode well for the housing market over the coming years - and we already have too few FTBs. It's the 'can't pay, won't pay' attitude of the younger generation that will drive the housing market over the next 5-10 years, and I think current older generation homeowners are in for a rude awakening. I mean, just put yourself in the shoes of a young grad. with 15k of debt and houses costing 20 times what you earn - would you throw your entire youth away working your balls off for a pile of bricks in the UK? Nope, me niether. Nomadd <{POST_SNAPBACK}> A very astute observation - excellent post.. Quote Link to comment Share on other sites More sharing options...
RRP Posted March 20, 2005 Share Posted March 20, 2005 When leaving Uni its a CAR, then some nice clothes, and some good few years of nights out and the credit card gets a whack taking their joint debts to 60K in no time at all. He has a point here. The attititude to debt/credit has changed. "Why, everybody else is doing it. so I will hit the plastic". Debt is no .longer a stigma. Will be interesting to see how many more graduates " go bankrupt". Seems like a viable option for those who have come from a humble background.. Quote Link to comment Share on other sites More sharing options...
RRP Posted March 20, 2005 Share Posted March 20, 2005 I also agree in the sense that Gordon and Tony are fully aware of the situation. Gordon is. Tony, it is rumoured, is a bit of a dougnut when it comes to economics. Quote Link to comment Share on other sites More sharing options...
laurejon Posted March 20, 2005 Share Posted March 20, 2005 Will be interesting to see how many more graduates " go bankrupt". Seems like a viable option for those who have come from a humble background I think I am right in saying that Tony Blair the caring prime minister has now closed the Avenue of Bankruptcy for Students. I think it was done in the summer of 2004. Students today cannot register Bankrupt on student debts, they are for life. Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted March 21, 2005 Share Posted March 21, 2005 record debt will have to mean record payback. Quote Link to comment Share on other sites More sharing options...
ʎqɐqɹǝʞɐɥs Posted March 21, 2005 Share Posted March 21, 2005 http://news.bbc.co.uk/1/hi/business/4366225.stmI think IR going from 3.5 to 4.75% have caused that already cause the shock factor, just look at new mortgage approvals, consumer spending and new car sales. By the summer we'll see unemployment ramping up, I think Gordan's already planned his escape route. <{POST_SNAPBACK}> I have noticed myself the number of job losses is slowly rising each news report. Quote Link to comment Share on other sites More sharing options...
laurejon Posted March 21, 2005 Share Posted March 21, 2005 Why should the taxpayer pay the social security bills of the Corporations when they lay off staff?. I think a good plan would be to charge the Corps a years dole money on each employee that they lay off to offshore the jobs. Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted March 21, 2005 Share Posted March 21, 2005 I think I am right in saying that Tony Blair the caring prime minister has now closed the Avenue of Bankruptcy for Students.I think it was done in the summer of 2004. Students today cannot register Bankrupt on student debts, they are for life. <{POST_SNAPBACK}> But if you're bankrupt you're bankrupt...aren't you? How do you exclude student debt? (Genuine question ) Quote Link to comment Share on other sites More sharing options...
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