Gary's views

Gary's weekly views

Each week an article by Gary has appeared in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here

DEBT

Is it too easy to get credit? I borrowed £8,000 from a bank last week off the Internet – first time I’d ever done it that way - to help certain relatives to buy a nice car. It took ten minutes flat, but I had to ring them to make arrangements to get the cheque. Did they want to quiz me further about my financial probity or the affordability of my rash move? Did they heck. They said, rather like Chris Tarrant, you don’t want to borrow £8,000, why not make it £12,000. I told them no, but when I put the phone down I have to admit I was momentarily tempted.
I was down at the Citizen’s Advice Bureau in Mayflower Street last Friday visiting their impressive new premises and hearing about the wonderful work they do. 30% of their advice relates to personal debt, and in the last 12 months they have helped local people grapple with a staggering £100 million pounds of debt difficulty. From young people who stumble into the red from the moment they are legally allowed to borrow, to very senior citizens who have no hope of ever repaying, it seems that no one is excluded from this seductive menace. Many lives never recover from the burden of crippling debt.

As we know from the glossy adverts; we are second class citizens unless we fill our lives with those essential lifestyle products. The cars, the holiday, the make up; we need it and we need it now. After all, we are worth it.

Banks are making record profits but bankruptcies are increasing. But fear not, even if we have county court judgments against our name, those smiling people on the tele will lend us more money, so we can go on spending.

Surely it cannot go on; the whole edifice will one day come crashing down on our heads.
Adults are entitled to make their own choices, but I do think that we could do more to hammer home the unfashionable message of financial discipline at school.

But what about the lenders? Should they be allowed to push their corrosive products on us like this? All the begging letters – begging us to borrow - and the endless phone calls; has it not got out of hand?

posted by Nigel on Monday, April 30, 2007

Gary's weekly views

Each week an article by Gary has appeared in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here

HOUSE PRICES

I used to think that when your children were eighteen they would be off your hands and freedom would come crashing in once again. Not so! Many similarly aged friends report to us their unexpected family experience: they keep coming back.

It is being talked about as a growing social trend – more kids are leaving home at a later date, and finding opportunity to come back to the parental bosom whenever they can.

One of the reason for this tendency is spiralling house prices. The latest figures tell us that average South Hams property prices are a staggering £280,000 and the Plymouth average is £161,500. In Plympton and Plymstock prices are probably on a par with the South Hams. So where does the next generation live? How can they afford to buy without parental assistance? Even for young professionals the property ladder is out of reach.

Young families should aspire to own their own homes. They need to make their own nest. Villages need all sorts of ages and incomes to keep them alive. Renting is fine to start with, but over 80% still want to own their own homes recognising that the acquisition of capital is a laudable aim, bringing security and responsibility for most of us.

Our region is especially challenged with more and more outsiders, some retired, some still at work but commuting large distances queuing up to buy in Devon and Cornwall, keeping our prices high.

So the affordability gap grows year on year. Unless there is a massive market correction – i.e. house prices falling significantly - it is a problem that policy makers will have to address.
In part the answer is supply – more houses will have to be built, but we dare not lose too much of our precious countryside. Sherford, if it gets the go ahead will ease the situation a little. Housing associations building affordable part buy, part rent, properties will help. But the problem with shared ownership is that most people want to own their entire house, understandably.

We have to go further. We need a government-led radical approach to tax and planning rules to help crack this problem. We need to consider a new form of legal tenure that will help keep houses for local people only.

posted by Nigel on Monday, April 30, 2007