Thursday, July 31, 2003

Just in case you thought massive consumer debt was only an American way of life, its heartening to know the Yanks are in good company with the Brits.
Fears that Britain is heading for a repeat of the 1990s housing crash were ratcheted up a gear yesterday as the head of the mortgage industry warned there was a "risk of complacency" over the surge in debt levels.

The Council of Mortgage Lenders, which represents the vast majority of the industry, urged government regulators to warn new buyers they could lose their home if they were made redundant or fall ill.

The comments � which came as Prime Minister Tony Blair said he was not worried about the burgeoning debt mountain � followed news that households are borrowing at the fastest rate on record. . . .

there were already warning signs flashing, including: the number of homeowners who have made no provision for meeting their mortgage payments if they lost their income; early signs of a rise in personal insolvencies; a fall in the amount of state support; a rise in the volume of write-offs of unsecured loans, and high levels of overall consumer borrowing.
The really interesting part of this article is how the number of home reposessions in Britain has halved in just two years -- from 23,000 in 2000 to 12,000 in 2002. It seems highly unlikely that most homeowners achieved rock-hard balance sheets in just 24 months; more likely that banks are willing -- for now -- to write off non-performing loans.

Looks like the Great Debtor Mountain Range crosses the Atlantic with nary a puddle between the peaks to dampen your toes.

Borrow-ho!

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