Monday, August 6, 2007

Reposessions, the only statistics that counts

Is UK subprime going the same way as the US?

The greater risk inherent in subprime lending means arrears are more likely to lead to repossessions, and that this is likely to happen earlier. So, as the CML itself argues, this rise reflects the increasing amount of subprime in the overall mortgage market.

Posted by confused76 @ 09:13 PM (430 views)
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9 thoughts on “Reposessions, the only statistics that counts

  • The use of subprime is a clever trick of marketing.

    An too many people fall for it. It can no more be contained than Cinram was contained from the Natural Gas Market.

    Today oil fell , for no actual fundamental reason. Most likely due to Bear and co. unwinding their long positions in the black stuff.

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  • Has anyone noticed how the BBC has been studiously burying the story about the largest independent US lenders’ collapse today?

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  • voiceofreason says:

    This agrees nicely with everyday observations.

    My contemporaries either have no or a v small mortgage from only having moved twice in the last 12 years and being unable or unwilling to make the next step up the ladder.
    Or they have a whopper of a mortgage in the £200K to £300K range if they have gone up a rung.

    So, the IR increases cane a few, and leave others untouched, or even slightly better off from returns on savings.

    Even more interesting is the way that those with small mortgages are so resigned to the unattainability of the next rung that they are even questioning the need to work so hard, considering part time work or lower stress roles. If it is a wider phenomenon, then rocketing house prices could tighten the labour supply indirectly over the next 5 years.

    Friends just finishing PHDs and looking at starting on £35K pa are even questioning the point of working altogether and contemplating extended travel.

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  • Errrrrrrrrrrm yes … with a PHD , well you know what they say… starting on £35k ?

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  • Looking at starting on that salary? Unless they have a job lined up they shouldn’t bank on getting that. I know two PhDs looking for work too – they’re both contemplating travelling abroad. The effects of wages not keeping up with house prices is not well considered but I know that I left my last job complaining to the MD that I couldn’t afford to live there on the salary I was on.

    I earn arpproximately double that now and instead of no longer affording it, I know longer want it. Neither to three of my friends, two with kids one of who is a long distance airline pilot and the other two work in corporate finance.

    I see the estate agents’ adverts are getting more desperate “You don’t want to be wearing fluffy slippers by the time you can get your own place … “.

    It’s criminal really, because its becoming obvious that in the medium term at least, that prices are in for a tumble.

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  • I’m just moving away from the south east for that reason: my pay doesn’t allow me to live here. 1 bed flats in Bracknell going for £180,000? Some 2 bed apartment at the end of my road going for £230,000? a mortgage on that would be pushing 6.5 times my income! My boss was pretty disappointed, but I bet there’s going to be a migration of younger workers away from the south east in the near future.

    Anyway, I’m moving to Coventry and renting for a bit. I was really hoping to buy before I get married next August but I’m beginning to wonder if that’s actually going to happen. I would not be buying as an investment, I actually want to LIVE in a house, but it’d be a mixed blessing if house prices were dropping next June when I was looking at buying. I’d like somewhere to live, but I don’t want to pour money down the drain.

    The solution, I suppose, is to get paid more; but I guess that’s only going to pump up inflation really.

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  • voiceofreason you are spot on with your comments, as I’ve mentioned on here before I don’t know anybody who has large debts but that could be because of my age group. I also have paid my mortgage off and am not prepared to borrow to the hilt to buy a house with an extra bedroom and work in a stressful insecure job in order to pay the thing off. The result of all this is that society is becoming more polarized, you have people like myself taking on a bunker mentality with no intention of moving and other younger people maxing out on debt in order to get on the ladder, this is not a good way to run an economy.

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