UK doomed by size of debts thread..

[Doggy Styles]

It shows that the UK is highly exposed to a European downturn.

Indeed we are but for all sorts of reasons, not just private debt.

[Doggy Styles]

Everyone Is Starting To Realize The Size Of Britain's Debt Crisis

Oh dear. Doesn't look good at all.

That's what happens with easy credit and little or no deposit on big loans. People just can't help themselves.

[TimberWolf]

Getting bigger by the day too.

[PAH]

Plus the ability to keep extending personal debt via mortgage equity release during periods of high house price rises, and lots of cheap unrestricted credit cards.

Personally I'm hoping they bring in the multi-generation mortgages (i.e. much longer than the current 25 year ones), so I'll have something for my children to inherit.

That way silly house prices can continue and we'll all be rich.

[Doggy Styles]

Plus the ability to keep extending personal debt via mortgage equity release during periods of high house price rises, and lots of cheap unrestricted credit cards.

Personally I'm hoping they bring in the multi-generation mortgages (i.e. much longer than the current 25 year ones), so I'll have something for my children to inherit.
That way silly house prices can continue and we'll all be rich.

I still find it hard to believe that equity release and 125% mortgages were not outlawed. The alarm bells were ringing when lenders relaxed the old "three time income" rules.

[pjclarke]

A similar point was made by graph number 6 here

BBC News - Top economists reveal their graphs of 2011

"This is the chart that struck me most forcibly, both for what it tells us about the debts of the private sector, in particular the private finance sector; but also because of what the Treasury chose not to tell us: that the public debt to GDP ratio is tiny compared to private sector debt to GDP ratio."

ANN PETTIFOR, DIRECTOR OF PRIME ECONOMICS

So much for Government borrowing being the root cause of all our ills .....

[Clever Hans]

^^ Yes.

Talking about unwise mortgages and unrealistic public sector workers is relavent to our economic malaise, but the article makes clear the overwhelming component of the debt is in the financial sector.

If you take the financial bit out for each country, the UK graph looks average.

Not that that makes things better or less worrying, but the bad guy in this view isn't working for the council.

[AtW]

So much for Government borrowing being the root cause of all our ills .....

PFI - Govt signs contract with private company actually borrowing the money, thus shifting effectively Govt debt off the balance sheet but with higher repayment costs.

[wim121]

I still find it hard to believe that equity release and 125% mortgages were not outlawed. The alarm bells were ringing when lenders relaxed the old "three time income" rules.

We couldn't get a 125% mortgage despite both having good credit ratings during the credit high and staying under the 3x (c. 2005). We could have got a bigger multiplier on income or even a 105% mortgage, but that would have been at an interest rate above 8% at he very least.

Instead, opted for a tracker 0.59% (switching to variable) above the 4.5% base rate. Was very happy and still am, when interest rates plummeted as expected.


Some other peers our age, were dumbfounded at me fretting over a couple of percent interest, but I was always dumbfounded by how someone COULDNT be concerned over it? What is the point in taking out a massive mortgage, which you will be paying off for your whole life instead of a 30 year term at an interest rate around 10% if you're lucky?

I feel aggrieved enough that the total repayment on a house is almost double the sale price. I would have a heart attack if I was like others, paying x3 or x4 or more over the term! Where is the sense in a £200k house costing you £600k to repay and afterwards the house only being worth £300k (taking in to account inflation)?


I found a major problem is the bank staff/financial advisors simply not advising people properly. Im not a financial genius, nor do I work in the industry, but I met some bank workers where I was more informed than they were. Some couldnt even answer simple questions about their packages such as equity repayment versus interest payment schedules.

All the dreamers (other customers) needed, was a sensible advisor/banker to tell them they couldnt afford something. To hell with the customer is always right.

[Doggy Styles]

All the dreamers (other customers) needed, was a sensible advisor/banker to tell them they couldnt afford something. To hell with the customer is always right.

Yes. Whatever one says about freedom of choice and all that crap, people need protecting from themselves.