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May 4th, 2012 
FAKE NEWS for the Zionist agenda - Defence Secretary Philip Hammond says banks are not solely responsible as ‘they had to lend to someone’
- Household wealth in the UK is now £787billion lower than it was at the end of 2007
- Experts warn of sharp rise in ‘zombie families’ who are only kept afloat by cheap mortgages
By
Hugo Duncan
19:10 EST, 3 May 2012
|
02:52 EST, 4 May 2012
‘Accept responsibility’: Defence Secretary Philip Hammond said the banks ‘had to lend to someone’
People who borrowed too much during the economic boom must ‘accept responsibility’ for their part in the financial crisis as banks are not solely to blame, a senior cabinet minister has said.
Defence Secretary Philip Hammond added that those who ran up credit card debts and took out loans and large mortgages were ‘consenting adults’.
As for the banks, he said, ‘they had to lend to someone’.
Mr Hammond’s comments came as experts warned the crisis has cost British families around £30,000 per household and risks creating a swathe of ‘zombie’ households.
Household wealth in the UK is now £787billion lower than it was at the end of 2007 before the banking crash and recession struck. And it won’t return to pre-crash levels until 2019.
But by far the biggest victims are middle class families and pensioners who have seen the value of their homes and savings plummet.
Despite the impact on consumers, Mr Hammond – who helped to formulate David Cameron’s economic strategy in opposition – said these people had to some extent brought it upon themselves.
He told the Daily Telegraph: ‘People say to me, “It was the banks”. I say, “hang on, the banks had to lend to someone”.
‘People feel in a sense that someone else is responsible for the decisions they made. Of course, if banks don’t offer credit, people can’t take it.’
Mr Hammond added: ‘We allowed our expectations to run away with us. We started living a lifestyle both in private consumption and in public consumption that we could not afford.
Afloat: An increasing number of households face alarming budget calculations
‘We borrowed to top it up… now the day of reckoning has come and we are adjusting. Households were spending more than they earned. That’s why household debt rose.’
Many have also been hit by higher
taxes as they bear the brunt of government efforts to repair the
country’s crippled finances following the implosion of the banking
system.
The £787billion
assault on household wealth is close to the £1,000billion of taxpayers’
money that was used to prop up the banks at the worst point of the
financial crisis.
The report – by the National
Institute of Economic and Social Research – warns that the punishing
squeeze on finances could lead to a sharp rise in the number of zombie
households.
The term is
used for those who are struggling to meet their mortgage repayments but
stay in their homes only thanks to low interest rates and leeway from
their lenders.
The Financial
Services Authority, the City watchdog, reckons that more than 800,000
of all mortgages are subject to ‘forbearance’, which means the owner has
either missed a payment or made one late.
It is feared many will lose their homes if interest rates rise or banks decide to clean up their balance sheets.
‘A significant number of households are already in quite a difficult situation,’ said Angus Armstrong, director of economic research at NIESR.
The report, published today, shows household wealth has fallen £787billion in the last four years from £7,647billion to £6,860billion.
It predicts that after inflation is taken into account, household wealth will not return to pre-crisis levels until the end of 2019 – 12 years after the peak.
It puts 82 per cent, or £645billion, of the fall in the last four years down to a 17 per cent slump in house prices.
The rest has come from a decline in the value of pension pots and families eating into their savings.
Savers have been hit by dwindling returns since the Bank of England cut interest rates to 0.5 per cent more than three years ago.
Millions nearing retirement have also been hit by quantitative easing – effectively printing money – because it cuts annuity rates.
Simon Kirby, a senior research fellow at NIESR, said: ‘It has been a particularly painful period of time for many UK households and it looks like this is going to continue. Homeowners have suffered particularly from this.’
Repayments: Low interest rates and lender leeway are helping people avoid having to sell their homes
The report argues that the collapse in household wealth has hit consumer spending and dented hopes of an economic recovery.
The fall in house prices has also plunged soaring numbers of homeowners into negative equity.
NIESR expects zero growth this year after the economy slumped back into recession at the end of last year – the first double-dip since 1975.
Growth is forecast to pick up to 2 per cent in 2013 and 2.7 per cent in 2014.
The report says output will not return to its pre-recession peak until the second quarter of 2014, six years and four months after the slump started, making it the longest downturn since records began.
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Liz Barret…how right you are !
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The Great Train Robbery was never in it!
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The average net worth of each household is still well above £200k….so I don;t think we need to worry too much just yet!
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Zombies staggering through a dead market – makes sense. Problem is, many of them have dug their own graves.
Perhaps the headstones should simply read “Never did so Many become so Greedy by so Few”
And now, the only way is down! (Unless your the grave diggers of course)
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just a couple of lines to thank the MAIL and READERS for all your help,concerning my problems with co-op bank,following maturing of my mortgage.yesterday i received my deeds and final statement ,after a year of wrangling and if it wasnt for the MAIL and READERS support,i would still have a problem.i am severely disabled and this was giving me a great deal of stress,i shall never be able to express my gratitude and good wishes to you all.
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The UK economy is (dangerously) reliant upon an active property market and the only way for this to happen is for the MPC to remove the emergency interest rates which will inevitably bring about a crash which will happen sooner or later anyway. Previous slumps have been short and deep with much higher interest rates but then very rarely lessons have been learnt from history.
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We are in a downward spiral and I cannot see how we will recover.
The Governments answer is to tax and tax which only makes the problem worsen but they are Blockheads.
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It seems quite fitting: zombie families represented by zombie estate agents!
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@Nick, Chatham, Kent, 4/5/2012 7:46 Yes a traditional mortgage works perfectly well, but the banks . brookers , other lenders lent too much causing pressures on the market they held responsibility over more than individuals have the savvy to. Imagine if all pubs let all their patrons drink until they were drunk, and actually enchouraged it to make more money. Advertised cheap booze to teenagers who know no better and told them it was good for them. Politicians told everyone it was a really good idea and good for their future and let the pubs carry on. (remember what happened when the ploiticians suggested filling up your car with petrol might be just for a short period of time). The mess on the streets and chaos wouldn’t be entirely down to the people drinking at those pubs. Also, even if you were one of the ones who had a little common sense, despite all your efforts to lead a sensible life you could not, because everyone else effects everything you now do.
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As every family knows, it’s the next generation that count – that’s why you have a family. So with that in mind, let’s remove all the artificial factors keeping Britain’s rip-off house prices afloat, reintroduce proper mortgage repayments and let house prices find their natural level so that the next generation so that the next generation can again start to hope to have at least half the living standards of their parents.
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