The credit crunch ?

[gbb]

Is it real ? Is it affecting anyone in a day to day sense ?

Dont want to delve into personal details or circumstances...but is it affecting anyone.
I ask because (luckily) my mortgage is very low, so i'm not really feeling it there, but...fuel bills, gas, electric, food...it's noticeable there.

Also, a colleague was at a continental market this weekend, talking to one of the traders. He said this is the worst...by a long long way, start to a year. People just arent spending money. Some of the traders were'nt even making a profit.

Answers on a postcard please

 

[rich p]

I sell to the retail trade and it's doom and gloom from most of the traders which reflects pretty grimly on my business. Our steel product prices went up 23% last July and another 7% next week so it's got to hit soon. I don't believe that inflation is 2.5 % .

 

[domtyler]

It's certainly visible here. When I bought my house seven years ago it was dead easy to get a 100% mortgage on a very low fixed deal for 15 years - and I was self-employed.

My friend, who has a full time managerial job, cuurently hasn't been able to find a bank here that's willing to lend him more than 90%, and he was actually asked for copies of his payslips as proof of income

Taking out a mortgage for more than ninety percent is a mugs game anyway. A small slip in the market and your in negative equity. Lose your job and then even once you've sold your house you have no way of repaying your loan!

 

[col]

The shops seem to be having a vey lean period here,some are down as much as 30%.But there are a couple of dives each year i think,a few weeks before christmas being one,and this might be the pay for or save for hols one?Someone at work mentioned mortgages,saying that 100% ones are not available now?

 

[domtyler]

Not so - if you have to do extensive renovations it's the cheapest way to borrow. My house with the renovation work completed six months after buying was valued at 150% of the purchase price. I could have bought it for cash, but the tax breaks I got on the mortgage payments made it more profitable to buy on a large mortgage. Rates are much lower in euroland, so I was able to get 15 years fixed for under 4% (although you wouldn't get it now).

You have not argued against what I said here, you are agreeing with me. Secured borrowing for the purposes of renovation and/or refurbishment is almost always a very sensible proposition as you will add value to the property. This would not leave you with the negative equity trap would it?

 

[Paulus]

Just come back from the shopping, Sainsburys, and I've noticed over the last few weeks that prices have gone up by approx. 20%. I don't buy extravagant stuff , just the normal everyday goods and food but todays total was £129 and there was no meat, I get that from my local butcher. The trolley was only half full. A month ago my shopping for a family of four was always below the £100 mark. Couple that to the rise in fuel bills I expect to be around £ 2000 a year worse off.

 

[ChrisKH]

No, I was arguing against you saying it's a mug's game, Dom. It might be a mug's game for you, but it was most certainly not a mug's game for me, nor is it for others who think things through

Risk is a personal thing anyway. What Dom may consider as particularly risky, Uncle Mort may consider acceptable. Or vice versa.

 

[ChrisKH]

Just come back from the shopping, Sainsburys, and I've noticed over the last few weeks that prices have gone up by approx. 20%. I don't buy extravagant stuff , just the normal everyday goods and food but todays total was £129 and there was no meat, I get that from my local butcher. The trolley was only half full. A month ago my shopping for a family of four was always below the £100 mark. Couple that to the rise in fuel bills I expect to be around £ 2000 a year worse off.

Yes, i would agree with this. What I don't understand is why this isn't being reflected in the basket of goods used to measure inflation. In every area of my personal life costs have gone up over an above the general rate of inflation (3-5%) yet this doesn't seem to be trickling through in government stats. As an example (and one of the reasons for commuter cycling) I took the kids to the science museum on Friday and the car parking charge at my local station had gone from £4.00 to £4.50 a day. This is the third or fourth hike in as many years. How can you justify increasing this by 12.5% other than to fleece commuters?

 

[Paulus]

Many goods that are used to calculate the RPI are non food items such as fridges,freezers washing machines and the like. These prices are not actually rising as fast as food items. They tend to remain fairly static. Cars for instance are also included and many of those are in real terms are now cheaper than a few years back. The government is quite crafty about what it includes in the inflation statistics

 

[col]

So it seems the government has tried to pull the wool as usual eh?If we had kept up with inflation,i think our wages would be a heck of a lot more than we are on now?

 

[domtyler]

Is it crafty? If you spend about £200 a week on food, that is £10,400 a year. But many families will spend far more than this on motoring. So why should it just be about food?

 

[col]

Is it crafty? If you spend about £200 a week on food, that is £10,400 a year. But many families will spend far more than this on motoring. So why should it just be about food?

How much food do you eat?most peoples wages are not much more that that anyway.

 

[domtyler]

How much food do you eat?most peoples wages are not much more that that anyway.

I mean for the whole household, that's not just my snackage bill col!

 

[Keith Oates]

#200 per week on food, no wonder they are saying that a world food crisis is imminent!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[fossyant]

I'm lucky that I've had my mortgage some years and it's not big, but certainly gas, elec, water have increased massively. I did a review of all my bills recently, and saved on the mobile substantially, saved on gas/electric (slightly) and moved landline / broadband, but these savings soon got eaten by general price increases. I also switched to cycle commuting last August following a change of job - I'd hate to be driving every day now with the price of fuel - that is scarey.

Food shopping's certainly gone up, but alot of that will be as a result of fuel and heat / light increases.