| Spiralling levels of personal debt are becoming 'a potentially large social problem' [message #386744] |
Do, 11 Mai 2006 15:56 |
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Some saw the writing on the wall months ago, if not longer. It was
clear it was all going to end in tears for so many and it's hardly even
got started yet .........................
Bank chief's debt warning
Becky Barrow, Daily Mail
11 May 2006
http://www.thisismoney.co.uk/credit-and-loans/debt-news/arti cle.html?in_art=
icle_id=3D408975&in_page_id=3D62&ct=3D5
SPIRALLING levels of personal debt are becoming 'a potentially large
social problem', the Bank of England governor warned yesterday.
The country's most powerful banker also issued a veiled warning to
house-owners not to rely on values climbing indefinitely. His judgment
that current prices 'seem remarkably high' raised the spectre of a
collapse which could plunge large numbers of families into negative
equity.
Experts were surprised to hear such clear warnings from a man who has
said in the past he prides himself on being 'boring'.
Mr King spoke out after new figures showed the scale of the looming
crisis around Britain's =A31.1 trillion personal debt mountain. More
than 105,000 people telephoned the National Debt Line between January
and April, a rise of more than 30 per cent on last year.
Chief executive Paul Mullins said last night the helpline had been so
'inundated' by desperate callers that it had been able to deal with
just 32,000 cases.
He said: 'Debt is a very serious problem. Many people are worried sick
about how they are going to get out of this hole.
'More people have over-extended themselves than ever before. If there
is a change in their circumstances, such as losing their overtime pay,
getting divorced or a rise in mortgage rates, their personal situation
is that much more unstable.'
The 'spend now, save later' culture which has gripped the nation has
already led to a record number of people being plunged into insolvency.
Figures published by the Insolvency Service last week showed 23,351
people were overwhelmed by their debts in the first three months of
this year. The total is the highest for a single quarter since records
began in 1960.
There was an extraordinary 142% rise in the number of debtors taking
out sorting out a deal with their creditors known as an Individual
Voluntary Arrangement.
The bleak picture was made worse by figures showing soaring numbers of
people struggling to keep up mortgage repayments. The number who face
losing their property is now at its highest level since the dark days
of the last recession in the early 1990s.
Mr King said: 'The proportion of unsecured debtors reporting their debt
as a serious problem has gone up. The number of calls to the National
Debt Line has risen quite sharply, so I think the signs are that a
potentially large social problem is materialising, with many households
getting into difficulty with their debts.'
Any rise in interest rates, a possible result of soaring fuel prices
adding to inflation, would deepen the crisis.
Analysts say debt problems are hitting younger people much more than in
the past, and the picture is likely to worsen as higher levels of
student debt kick in.
The average caller to another debt helpline, Consumer Credit
Counselling Service, is in their late 20s or early 30s and owes more
than =A330,000 to 11 different creditors. Asked in a survey: 'What is
the cause of your bankruptcy?', 50% admitted they misused credit.
The Insolvency Service says a typical bankrupt is a 41-yearold man with
debts of about =A346,000. But the numbers of people between 18 and 29
are rising rapidly, from 7.9 per cent in 2001 to 18.7 per cent today.
Mark Sands, director of personal insolvency at accountants KPMG, said
his clients are increasingly under 40, single with jobs but no assets
and no children. KPMG predicts that the number of personal insolvencies
will hit a record 100,000 this year.
The Bank of England says the rise is linked to a change in insolvency
rules which led them to be 'perceived as more debtor friendly'.
A typical bankruptcy now lasts for less than a year, rarely involves
losing a home, and is seen by many borrowers as much simpler and less
painful than repaying a pile of debts. But Frances Walker of the
Consumer Credit Counselling Service said people should think very
carefully before taking such a step, adding 'it can affect your
employability'.
Miss Walker said part of the problem was that credit cards were readily
available and companies had lowered the requirements, in some cases,
when considering people for credit. She said: 'Often the individual may
not appreciate how much they will end up having to pay back.'
http://www.housepricecrash.co.uk/forum/index.php?act=3DSF&am p;s=3D&f=3D22
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| Re: Spiralling levels of personal debt are becoming 'a potentially large social problem' [message #386750 ] |
Do, 11 Mai 2006 16:10 |
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>"Crowley" <crowleyalastair [at] yahoo.co.uk> wrote in message
> >news:1147355802.370020.98260 [at] j73g2000cwa.googlegroups.com...
>Some saw the writing on the wall months ago, if not longer. It was
>clear it was all going to end in tears for so many and it's hardly even
>got started yet .........................
>Bank chief's debt warning
>Becky Barrow, Daily Mail
>11 May 2006
> http://www.thisismoney.co.uk/credit-and-loans/debt-news/arti cle.html?>in_article_id=408975&in_page_id=62&ct=5
Didnt you post the exact same article yesterday? Oh yes I see you did except
that was the original and this was a report on it. I expect tomorrow you'll
be posting about your report here today of the DM's report of Mervyn King's
speech yesterday?
Just out of interest, what do you expect people to do as a result of your
postings? Should I sell my house? Have you sold your house (I dont think you
have yet, IIRC?)
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Spiralling levels of personal debt are becoming 'a potentially large social problem' [message #386751 ] |
Do, 11 Mai 2006 16:27 |
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Tumbleweed wrote:
> Didnt you post the exact same article yesterday? Oh yes I see you did except
> that was the original and this was a report on it. I expect tomorrow you'll
> be posting about your report here today of the DM's report of Mervyn King's
> speech yesterday?
Interesting take on it by the Daily Mail though isn't it ? and splashed
across the front page an all. Sentiment must be taking a beating today
what the all the talk about the next move in rates being upwards.
> Just out of interest, what do you expect people to do as a result of your
> postings? Should I sell my house?
'People' have to make their own minds up. They can believe everything
the banks, politicians, estate agents etc tell em or try to read
between the lines to see what's really going on.
>Have you sold your house (I dont think you have yet, IIRC?)
The last house I owned was in Spain, sold it 3 years ago. Since I
returned to GB just over a year ago I haven't bought. What's the point
when they'll be so much cheaper next year ?
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| Re: Spiralling levels of personal debt are becoming 'a potentially large social problem' [message #386794 ] |
Fr, 12 Mai 2006 02:06 |
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In message <1147357672.883115.281640 [at] j73g2000cwa.googlegroups.com>,
Crowley <crowalas1234 [at] yahoo.co.uk> writes
>The last house I owned was in Spain, sold it 3 years ago. Since I
>returned to GB just over a year ago I haven't bought. What's the point
>when they'll be so much cheaper next year ?
Shouldnt there have been a <g> after that. If you'd bought 3 years ago,
it would have been cheaper than now, and probably wont fall below what
you would have paid.
--
Richard Faulkner
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| Re: Spiralling levels of personal debt are becoming 'a potentially large social problem' [message #386804 ] |
Fr, 12 Mai 2006 10:28 |
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Richard Faulkner wrote:
> In message <1147357672.883115.281640 [at] j73g2000cwa.googlegroups.com>,
> Crowley <crowalas1234 [at] yahoo.co.uk> writes
> >The last house I owned was in Spain, sold it 3 years ago. Since I
> >returned to GB just over a year ago I haven't bought. What's the point
> >when they'll be so much cheaper next year ?
>
>
> Shouldnt there have been a <g> after that. If you'd bought 3 years ago,
> it would have been cheaper than now, and probably wont fall below what
> you would have paid.
I sold it 3 years ago which wasn't bad timing as the Spanish property
market (in that particular area anyway) ground to a virtual halt soon
after and from what I hear, has been pretty dire since...........
apart from Irish buyers of course. There's just no stopping those lads
at the moment ;-)
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| Re: Spiralling levels of personal debt are becoming 'a potentially large social problem' [message #386806 ] |
Fr, 12 Mai 2006 11:03 |
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Richard Faulkner wrote:
> In message <1147357672.883115.281640 [at] j73g2000cwa.googlegroups.com>,
> Crowley <crowalas1234 [at] yahoo.co.uk> writes
> >The last house I owned was in Spain, sold it 3 years ago. Since I
> >returned to GB just over a year ago I haven't bought. What's the point
> >when they'll be so much cheaper next year ?
>
>
> Shouldnt there have been a <g> after that. If you'd bought 3 years ago,
> it would have been cheaper than now, and probably wont fall below what
> you would have paid.
According to the nationwide Index
http://www.nationwide.co.uk/hpi/downloads/Monthly.xls
A house bought 3 years ago, would on average be worth 33% more today.
During that time the annual rate of increase has always been positive
varying from 1.8%to 22.2%
The decision to wait does not appear on the face of it to be justified
by the facts.
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| Re: Spiralling levels of personal debt are becoming 'a potentially large social problem' [message #386811 ] |
Fr, 12 Mai 2006 14:08 |
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Mel Rowing wrote:
> According to the nationwide Index
>
> http://www.nationwide.co.uk/hpi/downloads/Monthly.xls
>
> A house bought 3 years ago, would on average be worth 33% more today.
>
> During that time the annual rate of increase has always been positive
> varying from 1.8%to 22.2%
>
> The decision to wait does not appear on the face of it to be justified
> by the facts.
I didn't make a decision to wait 3 years ago. I was living abroad until
just over a year ago so had no inclination to buy in GB. I didn't buy
when I came back which has proved to be the right decision as prices
have fallen round here as I suspected they would. Several houses I
looked at a year ago are still unsold and have been reduced by between
5 and 15%.
Plenty more reductions to come IMO.
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