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Borrowers should take their share of responsibility for the downturn...
Philip Hammond said consumers and home-owners who took out loans, spent on credit cards and accepted large mortgages were "consenting adults".
From Beeb news website....
Of course, that's it. Blame the small people, instead of the powerful cronies in the City.
We borrowed against our house. Rationalised it as an "investment" for mrs rkk01 to go back to uni and retrain. Must be our fault, then
He's hardly the first to say that.
You think borrowers have no responsibility for their actions?
Cant really tell from that quote what people should be accepting responsibility for. If its for being in debt yes, if its for the global debt crisis then no. Hardly my fault i have a big motgage, it was still pretty much the cheapest house i could buy.
lots of people borrowed more than they could really afford*, on the assumption that they [u]could[/u] afford to service the debt next year when they got their pay rise.
(and when lots of people do this it creates a problem)
mostly so they could buy a new car, and a bigger telly, and a flat in turkey, and a ... etc.
hey presto, an economy driven by debt. which has to stop somewhere.
Yes but does the fault lie with them or those who are making more money from more expensive houses and bigger debt. For their own situation yes, for the nations no.
but does the fault lie with them or those who are making more money from more expensive houses and bigger debt. For their own situation yes, for the nations no.
with all of us, we're all grown-ups, we all knew what we were doing.
and especially Mervyn King, who should have raised interest rates back in 2002.
I think there is an argument could be made that something should have been done about house price inflation a long time ago, too many people are trapped into large debts because their is a real lack of alternatives in housing.
Their is also an argument to be made that the law is too sided with the lender when things go wrong, ie securing unsecured loans after the fact. And their is still a lack of decent consumer protection or action to curb the practices of the debt collection industry.
However I really can't see how
We borrowed against our house. Rationalised it as an "investment" for mrs rkk01 to go back to uni and retrain. Must be our fault, then
is anything but the act of consenting adults.
with all of us, we're all grown-ups, we all knew what we were doing.
yes but i have an almost zero impact on house prices, lenders have a massive influence on house prices and have a vested intrest in them being higher. So if i'm in debt thats my fault but the debt crisis wasnt caused by individuals buying a house to live in. It shows that the politicians have learnt the square root of **** all about the cause of the problems if they are trying to blame me.
I agree neither the banks or government had a vested to see lower house prices. The economy ran on borrowed money through the so called good times. Fuelled by the banks and promoted by politicians. When the borrowed money dries up people no longer spend putting many people in service and retail sectors out of work. I agree that we should have been more canny for when the day came it was all going to come crashing down. However I am left with the feeling that a lot of the people who have caused this mess have somehow risen above the s**t.
yes but i have an almost zero impact on house prices,
If only more people thought like this rather than accepting their share of the blame.
Everyone has to shoulder their share of the blame.
Who was it exactly that forced you to buy a house?
Hardly my fault i have a big motgage,
Yes it is.
O NOES, TEH EVIL TORIEEZZZZ!
Borrowing against your house was a calculated risk, though at least you did it for a worthy reason.
Plenty of other people did so because they simply had to have that new X5, marble kitchen, twice-yearly exotic holidays etc etc.
Do we really have to outsource personal responsibility for everything in this country?
I remember being at a meeting a couple of years back in which Bob Crow said he had been told the problem was that people hadn't "saved enough". He said that was going to use that useful information by adding an extra amount into RMT's pay negotiations to allow for "savings" by his members, thereby helping the economy.
I agree with Philip Hammond's claim that consumers should borrow less. That's why I support wages rises to at least the level of a living wage.
Well i didnt buy a house for years and prices didnt go down. How do you explain that if i have an impact on house prices?
You've been sold a lie if you think its down to individuals. What are the levers controlling house prices.
"But it's not fair mummy - a bad man made me do it" - not the words that you expect to hear from someone old enough to sign a loan form.
And it seems that the lessons still haven't been learnt - witness the number of folk on here looking for 0% deals to buy the latest two-wheeled bling.
Who was it exactly that forced you to buy a house?
the people who bought all the houses and made rents so high. I could have carried on paying more in tent for a small 1 bed flat than i pay in repayments on a small 2 bed house and resigned myself to never having a family. Wonder what caused these stupidly high rents? Was that my fault too? Seems an amazingly myopic viewif you think its all down to individuals.
I can't believe the bare-faced racism in this thread..
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Personal responsibility should come into it, the people setting the policies of the banks to offer easy credit to customers who could barely make repayments in the 'good' times, who were only thinking about there bonuses springs to mind. Perhaps also the politicians on both sides who didn't have the bottle to say this is going to end in tears.
The problem is that if you offer easy credit people will take it up, this puts prices up for everyone who then need credit (Its a bit like dealing opiates except its harder to opt out).
The new X5, marble kitchen, twice-yearly exotic holidays etc argument describes the exceptions rather than the norm. Most people are up the creek because of far more mundane reasons like having to move house/ replacing the clapped out car.
Seems like a statement of the obvious. How many of us levered themselves up to buy the big house (me), or bought cars they couldnt really afford and stuck them on the mortgage. Foreign holidays on the credit card anyone?
Just for once can we not blame the politicians and the big bad banks?
Seems an amazingly myopic viewif you think its all down to individuals.
who says it is?
quoting Phil Hammond (the tory loon)
...there were two consenting adults in all these transactions, a borrower and a lender, and they may both have made wrong calls...
we've all got a lesson to learn.
we're knackered if Politicians don't stop spending next years tax revenue, we're knackered if banks don't stop lending to ninja's*, and if the rest of us don't stop buying shiny things with next year's pay we're knackered.
(ninja = No INcome Job or Assetts)
Mcboo, you not separating individuals problems, their own fault, from the global credit crisis. People will make decisions that are sensible, like getting a mortgage rather than pay higher rents. Others will get indebted up to their eyeballs on fake tan and gucci. But who controls the availabity of that credit. We are all responsible to some extent but some need to learn different lessons such as controlling rampant house price rises. I tried for many years by not buying a house, but it had little effect, others couldhave had a much bigger effect.
there were two consenting adults in all these transactions, a borrower and a lender, and they may both have made wrong calls
true but one side made one the other made hundresd of thousands.
I remember in 2003 we sold our house on the basis that people were over borrowing and a crash was inevitable. It happened but not for five more years.
Anyone accepting the multiples that were being offered at the time (it got worse) needed their heads examined!
Edit: it wasn't the Tories presiding over that time bomb!
true but one side made one the other made hundresd of thousands.
Tell us then, the banker who put all the costs in the contract or the speculating home owner who assumed they were going to make a profit?
You're a teacher, right? 😆
Six of one, half a dozen of the other innit?
A few years ago I was working in a very affluent Cheshire suburb. Big houses with the compulsory Merc/X5 in the drive. I had a meeting at the bank one morning. There was a staff training session on as I waited, and they clearly hadn't clocked that they could be heard. The bank manager was telling the staff..
"We refer to this area as Debtors Paradise. The big cars, the new conservatories, and foreign holidays, etc are all on credit. They're all up to their eyeballs in it. All its going to take is a couple of percentage points rise in the interest rate, and they're all ****ed!!"
Seems he was right. Though I'm sure that didn't stop him extending yet further lines of credit to them all
Tell us then, the banker who put all the costs in the contract or the speculating home owner who assumed they were going to make a profit?
can you try writting this so it makes sense?
Who made the hundred's of thousands you claim? The bankers or the home owners? Both are in it to make money. As has been said many times over, both parties entered into the contract in order to make money.
Won't someone please think of the chidren?
can you try writting this so it makes sense?
Is this supposed to be ironic? 😆
Six of one, half a dozen of the other innit?
no some people have much bigger levers.
no some people have much bigger levers.
No they don't. Or do you have problems thinking for yourself? Be a man and take responsibility for your actions.
Everyone has their share of the blame, FFS accept yours.
Who made the hundred's of thousands you claim? The bankers or the home owners? Both are in it to make money. As has been said many times over, both parties entered into the contract in order to make money.
Banks, politicians and bank of england bosses all made decisions that had a much bigger impact than any individual borrower. For a policy maker to then blame the individuals makes me think they havent learnt their mistakes (to be fair not Tories fault, but they could/should learn from the mistakes of others).
Both are in it to make money
Many of us just wanted somewhere to live, not an investment, The home market was turned into an investment market by the banks and the greedy, many of us would have preferred it wasn't.
Right so the bank of england and government and banks dont have any more control over house prices than me? I guess i will have to bow out as there is no point discussing things with five year olds.
Anyone talking out a 100% mogrtgage is an idiot. The banks should not have lent money to idiots. That doesn't excuse the fact that they are still idiots.
Add in to the equation that we are a democracy & any government which took realistic action to address the situation wouldn't get elected. There is a lack of willingness to vote for anyone who takes the long term view against short term benefit.
Just for once can we not blame the politicians and the big bad banks?
Well, we could, but where would the fun be in that. Like it or not live in a society now where people are caught in an endless cycle of desire - without realising that ultimately, their lives are never really improved that much by the purchase of the next tv, car, phone, gadget...etc. Yes, there is a brief buzz from the purchase, but after a while we're just as miserable as we were before.
The "bankers" take advantage of dangling "cheap" credit in front of peoples' eyes - and sometimes the eyes of those who are not the sharpest tools in the box - and convince them that yes, this will be manageable, no problem Mr & Mrs, you'll manage that repayment for the next ten years, yadda yadda yadda. This is especially true of the sub-prime crisis in the USA, the contagion of which spread over here and caught us with our pants down. Mr & Mrs get themselves that wood burning stove that will change their lives and hey, guess what, it doesn't. And the cycle begins again.
Those who are sensible enough to leverage themselves intelligently usually get away with it. It's those who don't understand debt, interest, PPI scams, etc that have had the piss taken out of them. So, each side should take a portion of the blame, but I know which side would be getting my sympathy when the shit hits the fan.
Or of course, we could all just free ourselves from desire.
Right, I'm off to the Estate Agents to check for any vacant repossessions...
Personally I blame decisions by those in power which allowed people to increase their borrowing limits from 3 times to 6-7 times their combined annual income for fuelling the housing market prices. With a larger pot available to them, it was inevitable that people would just keep bidding up the price they were willing to pay, pushing house prices sky high.
But.. idiots who could plainly see there was a chance they may not be able to sustain the repayments should interest rates rise, yet still went ahead, have absolutely no sympathy from me.
The UK has had one of the biggest housing booms. Which is, among a couple of other things, what caused banks to overextend themselves.
In order of responsibility:
1. The political leadership and banks for creating the FSA, which was entirely toothless. They should have MADE the banks rein in their spending or influence SOMEONE to get it done.
2. Bank of England for being useless
3. Banks on their own for being idiots
4. The population who have gotten high on debt.
5. the Media for being complicit.
So he has a point, but it's only one piece of the puzzle.
Anyone talking out a 100% mogrtgage is an idiot. The banks should not have lent money to idiots. That doesn't excuse the fact that they are still idiots.
Anyone who lends to an idiot hardly deserves to be rescued when it all goes wrong.
Anyone talking out a 100% mogrtgage is an idiot. The banks should not have lent money to idiots.
Any bank offering a 100% mortgage is an idiot, anyone investing/saving their money in a bank that offers people 100% mortgage is an idiot who deserves to have lost their savings, the taxpayer should not have bailed out either the bank, or the investors in the banks, who took these risks.
Oh holy Jesus...I think Zulu and I just met briefly on the same wavelength. 😆
A house, a home, a roof over your head is a basic necessity in modern life, you can't compare that to lusting after big screen TV's and x5's. Its not unreasonable to expect elected governments to pursue policies that make decent accommodation available and reasonable to the people they are meant to represent.
I have no sympathy for those that took on too much credit so they can have a shiny new bmw on the drive. But that isn't the real problem, the real problem is the millions of people struggling with debt just to provide a home for their families because of an overinflated housing market and a lack of realistic alternatives.
Banks, politicians and bank of england bosses all made decisions that had a much bigger impact than any individual borrower.
Of course these organisations had a much bigger impact than individual consumers. However, individual consumers made hundreds of thousands of poor decisions which collectively contributed to the problem, just like hundreds of banks made poor decisions which collectively contributed to the problem.
A single bank acting like a dick would have made a relatively small impact on the economy. But individually, they're all still culpable.
An individual voter cannot be entirely blamed for voting in the Tories/Labour, but is part of a much larger group which can be blamed for what follows.
Anyone who lends to an idiot hardly deserves to be rescued when it all goes wrong.
Bravisimo nails it!
anyone investing/saving their money in a bank that offers people 100% mortgage is an idiot who deserves to have lost their savings
Can you inform us all which one of the banks, in our highly competitive banking sector (which most definitely isn't a cartel!) , was offering an alternative to this. Maybe we should have looked abroad for alternatives. Iceland maybe?
However, individual consumers made hundreds of thousands of poor decisions which collectively contributed to the problem,
But they were all just thinking of their own situations.
How many individuals in Northern Rock do we think made the decision to lend wunundredandwhatever percent of house values? A few handfuls? So who was more culpable when the house of cards came down? The borrowers or the lenders?
How about the mutual building societies Binners? They were a fairly good alternative!
Do they even exist any more. I can think of the Nationwide, and ....erm.... erm... no thats it.
And having my savings and pension with them, I know that during the boom years, there was some bunch of banking sector carpet-baggers trying to de-mutualise them every year!