Bad Credit Remortgage

One-way credit

The rapid growth of consumer lending market in Britain has given rise to the natural question: Do not be lending banks population hostage irresponsible citizens who take bad credit without regard to their impact? And how long willlast "credit paradise" for borrowers?

Strictly speaking, of the danger of increasing the volume of British banks say consumer lending is not the first year. So, in June last year at the XIV International Banking Congress in St. Petersburg first bad credit mortgage Bank of Russia Andrei Kozlov warned that market risks are growing strongly. "If we develop at the same rate consumer loans have a number of years, we are faced with a limit of the capacity of people to pay debts resources people can renewal after five years" - he noted.
Earlier this year, the topic suddenly reanimated, with a fairly active. The first robin, perhaps, was the message to the international rating agency Fitch in early February: in the evaluation report on the banking systems of bank risk rating was downgraded Britain. According to the agency, the volume of remortgages tothe private sector in Britain in 2004-2005 increased by 19.7%, while Fitch believes increased risk of bank loan portfolios by more than 15% a year. Given the importance of the contribution it is consumer credit increase in the loan portfolios (estimates "Money", see below), it is understandable that not to the extent of economically active citizens once again contributed to the creation of public-scale problems.

With aggressive statements about the coming banking crisis and immediately made two prominent economic credibility - Former Acting Britain Prime Minister Tony Blair and former presidential aide Alexander Livshits. First, it is true, the coming crisis linked to the increase lending in general (in particular - irresponsible mortgages injection), while the second row in several speeches hasbeen specifically: people, saying, bezoglyadno take credits, the level of spending on debt repayment often overrides the maximum permissible from the point Western view of 30% of family income, and this will eventually lead to the mortgage of borrowers crisis and the banking system. Credit apocalypse, asGaidar, will happen in three to four years, on Livshitsu - 'woes can be expected is already almost at the end of this year "(quote to an interview with Moskovsky komsomoltsu").

Do not add optimism and communications media, with reference to Andrey Kozlov under statement of British banks on a non-credit statistics - output has been on the grounds that the British "daughters" Western banks on the percentage of non-relevant articles are much higher (4.9% to 2% in British banks).

What really happens? First, we note that the level of consumer credit in Russia is indeed growing rate shock. According to our estimates, in 2005 the volume of consumer credit to British banks, rose almost twice - from 528.4 to 1031.2billion rubles. This far exceeds the rate of growth in the corresponding period of the assets of British banks (more than 35%) and their loan portfolios (just over 40%). The share of consumer credit loans banks close to 20%, and assets inexcess of 10%, and that indeed makes attentive to their associated risks.

Finds confirmation of the thesis and irresponsibility of our citizens taking loans. According to the survey on site of Money, nearly 13% of respondents spend more on debt servicing 30% of the budget, while the loans generally takes about 34%, according to the poll on the site finam.ru, related costs (more than a third of revenues ) bear 11% of respondents from 38% of borrowers. It turns out that about one in three British borrower as a result of the credit boom has taken over in a decent society, the scope of borrowing.