credit crunch...good or bad...or indifferent...

okay how many of you have benefitted or lost due to the credit crunch…or as I said dont care…

Well for me at work I am a small fortune a month better off, interest payments on loans and mortgages are saving me nigh on more than 50% of my own personal wages…Its virtually covered the costs of taking on 7 part time shift workers and one full time IP engineer…if they can reduce NI then this will allow me to grow even further with another salesman and hoepfully increased sales…

Personally the reduction in mortgage interest rates ( I am on a tracker) has saved me another small fortune and the reduction in gas and electricity prices, likewise has saved me a ton of money…

If they now introduce a tax rate cut then I will be even better off…so all told I am better off in every sense of the word…

Oil prices should be falling more than they have and the government should be forcing it to below 80p for diesel and petrol…not 96p and 106 respectively…

Don’t get me wrong, I’m not complaining but as you asked, personally as I have no debt of any kind - no mortgage, no loans, no credit cards, etc, I’m probably a bit worse off as the interest I’m getting on my savings is decreasing and my future pension is probably not what it was.However, the company I work for is doing better (I’m in IT outsourcing and when times are hard we get more work not less as other companies look to save on their IT costs) and my annual performance pay rise in January is looking better as a result. Swings and roundabouts…

Wow to have no debt would be amazing! :stuck_out_tongue:

being also on a tracker mortgage, I’m very pleased about the reductions, ditto for other bills and petrol and fingers crossed so far, no one has suffered where I work, however, this doesn’t mean that no one WILL suffer in the new year…I think we should see a bigger impact on businesses then.

To answer your question, better off for sure…how long for remains to be seen :slight_smile:

Yes, but getting to that point is the result of a partner’s death and a house sale, so I wouldn’t recommend that route. :frowning:

I think in the medium term very few but the very rich will benefit.

It’s nice to have lower lending costs etc, but when those deals will come to an end, we won’t see lending costs as low as they have been. More importantly, it will take a while for the trouble to spread out. Business my seem good in certain areas, but it’s likely to turn around. Only imagine the impact of GM going bust (personally don’t think it’s going to happen, but take it as an example). You may enjoy very cheap motors for a while (huraah), but after that, it’ll mean all suppliers to GM will see their output reduced, employees of those suppliers will be made redundant, companies will move out property, people will need to sell the house because they can’t keep mortgage payments up, people will loose buying power, other companies therefor will go bust … and 6-12 months later in this circle and you’ll find most of us are worse off.

Me personally? I had a 90% Norther Rock mortgage on a fix rate deal. Had the choice of staying with Northern Rock and pay a 7.8% interest (up from 5.25%) or find a new deal which meant having the house valued at … £10k less than what I bought it for, which meant needing to find £10k to top up the mortgage to still get a not very good mortgage rate (difficult to find a 90% mortgage if you’re self employed).
I promisse, many people will go bankrupt when all these fixed rate deals come to an end in the next 12 months, and that’s no good news for anybody.

INTERESTING, so many people have seen good changes and yet everyone is still telling people worse is yet to come and its all bad…not sure I agree, with more money I have employed more people and I will continue to take people on…

the issue of benefitting only the rich is not true, I am not rich but I have benefitted…dont see how that statement comes into play other than from the newspapers…which is mostly twaddle anyway…

one of the biggest issues, that destroys peoples faith and confidence, is not knowing how long the bank will keep interest rates low…

Think I’m slightly better off. Not done the figures. I’m pretty sure our rent will go up when we look to renew the contract and then chances are everything else will go up…except the wages.

The trouble is, someone/some people out there is/are making money on the financial downfall and has forced it to happen. I hope whoever it/they is/are soon enjoys the suffering of a massive loss to their dosh cos they deserve it.

Dries not sure about your last point. I would have thought that when you come off your fixed rate mortgage you will be better off as the variable rate is now down to about 5.5% for borrowers- i.e. less than the fixed rates a lot of people are on. IMO sadly, there will be more of a problem with people who have overstretched themselves going into negative equity as the value of their houses fall. Even if they can keep up the repayments they are going to lose when they come to sell.One good thing that might come out of all this is that people might stop buying things on credit with no realistic idea of how they will pay it back. Call me old-fashioned but IMO thats the way it should be.

Hmm to a degree they have already taken the money…its in the developers hands, those who built a house worth 500,000 and then the idiot comapnies that loaned the money at 110% of value ie 550,000 to a guy that was earning 30k a year…this is the reality of what has happened…he likely bought on the basis that in a year the price would go up and he could sell making a profit…afraid not, times up, now pay up and off they have trotted into rented flats, never to be seen again and no way to chase them for any money…houses not selling so serious cash loss…no way to recover the money at all…hence the sub prime debacle…the money has already gone…BUT, it must be out there somewhere…all we have to do is persuade the people with it to spend it…

And yes there will be some people benefitting from the share price fluctuations,but thats never going to stop…its those that bet on share price movements that I despise, they do their best to influence the market to move in the direction they want and can make unbelievable amounts of money…to no one but their own benefit…thats crazy… (so too is share trading but thats a whole different subject)

I’m a little worse off as the interest rate on my savings has dropped, in reality only a couple of hundred quid a year.
I have no debts either, so the drop doesn’t help there. My job is stable, i work in print distribution, and people always need to get flyers out - it’s one of the areas that grows in hard times cause it’s cheap.

My major ‘investment’ is in streetart, most of the pieces i have won’t depreciate in the long-term, but they’re worth a bit less now than 6 months ago. Luckily I have no need or desire to sell anything at the moment. I’m looking to buy a house in around 12-18 months once prices have bottomed out. (and mortgage lending startts again!)

I know many mates who are freelancers etc who have seen work dry up though, and really feel for anyone in danger of losing jobs/homes through no fault of their own.

Well, I remortgaged at the beginning of September, at which point the rates were higher. So yes, my mortgage payments have gone down, and I was very fortunate that I could source the extra cash to remortgage at that time. The problem for people who come off mortgage deals now is that no banks will lend them money at a reasonable tracker rate unless they have a huge deposit. So if you have a 90% mortgage you took out in the last 2 years, you’re likely fooked. Your property will have gone down 10-20% in value and nobody will lend you more than 90%, and nobody will lend you money at a “reasonable” rate more than 80% or so. So if you have a £150k house, you suddenly need to “find” £10-20k in order to remortgage, and you’ll still be on a crap deal. That might be sustainable when you have a steady job and have put some money aside, but once you loose your job for a couple of months too long, you’ll have little choice but default on your mortgage.

I may sound a bit like a pessimist, but because of the work I do, I gained a quite good understanding of how it all works, and I honestly believe it’s going to get very messy for a lot of people before it’ll get better.

Sorry 2strokes, my post may have sounded like it was directed to you, but it wasn’t. I’m not sure what you do for business, and I know some people are going to do really well out of it (thinking auction houses for example). Off course I believe you if you say you are doing better out of this, and people who see the opportunities early and take the risk will do better. The only risk, in my opinion, is the question whether your growth will be sustainable in the medium term. I trully hope for your sake it will, but there is a risk that the demand for whatever it is you are selling is going to shrink significantly as the effects of the crisis slowly take place. If you manage that risk well and have a good cash flow, you’ll come out of it better, no doubt, but I think a lot of small and medium business are going to suffer when they loose a couple of big clients.As for why the rich are doing well out of it? The cash rich don’t need credit, and their cash is very much in demand. So they can sit out the crisis, and pick up opportunities (buy cheap equity).

what good is being personally better off if the country as a whole starts to stutter…

Services etc start to be cut back and a general ill feeling is in the air.

Luckily all seems to be OK at work for now but we are going through a major outsourcing project so time will tell. I work for a healthcare company and sales are falling, forcing prices to be lowered so costs must drop too.

Unfortunately I moved house last October when prices were sky high and the interest rate was at it highest - for a number of reasons that were right for us at the time we took a 5 year fixed deal so am now paying 2% more than I need to in interest and own a house that is worth less than I paid for it. At the moment it isn’t too bad as we dont want to sell and look at it as a long term investment.

The whole thing does make me quite nervous as my Mrs is off work at the moment looking after our son. There are people who are worse off than me though so I dont complain:)

Dries you probably know more than I do but my experience coming off a 5yr fixed rate mortgage was that it automatically reverted to the Building Societies standard variable rate. I didn’t remortgage as I didn’t need to raise any additional capital. I didn’t ask my lender to find me a new fixed rate or a tracker or anything. My mortgage remained the same mortgage it was just no longer on the fixed rate. Initially my monthly repayments went up but since the Bank of England base rate started coming down my repayments have gone down too because the Building Society reduced their standard variable rate. :slight_smile:

As long as my job is safe i don`t care about the credit crunch.

Hear hear:cool:

Well I think it’s two sides to the same coin - yes interest rates are coming down on loans which benefits most with credit, but on the other hand that is only happening because the government is desperate to keep the machine rolling.

I personally think these drastic interest cuts are the equivalent of a doctor in ER sticking that massive needle of adrenaline into a dying patient’s heart.

And I’ve not read much about banks giving loans out that easily and that means businesses won’t be able to finance projects/expansion and so they’ll start going pop very quickly.

In summary, when banks start going down it’s serious.

Also, this is without mentioning the nightmare exchange rates.

thats not really benefitting the rich, its benefitting the opportunists who have access to cash,…not the same thing I think…and I certainly didnt mean to imply that you were having a go so sorry for that understood what you were saying but not why…