Brittania: Feed Us!

La Rouche PAC

(LPAC) -- Almost 1 million British households are struggling with their mortgage payments, and another 1.8 million 15% are having problems "at least occasionally," according to a survey released by the Bank of England in its latest Quarterly Bulletin. Things are going to be a lot worse, the tabloid Daily Mail reported today. These figures are already as high as 1995, at the tail end of the last house price crash in Britain, and this survey only took place in September, as the new crunch just started to hit. Annual mortgage payments jumped by $7.2 billion this year and almost 10% of households said they have to to borrow more to cover their mortgages, and another 10% are taking on second jobs and overtime, to deal with the rising mortgage costs.

Britain is actually bankrupt, with personal debt exceeding GDP this year, for the first time in its history. Personal debt is a whopping $2.690 billion, bigger than the estimated GDP of $2.666 billion, according to a new report prepared by accounting firm Grant Thornton. Economist Stephen Gifford said that the only reason Britain is not "technically bankrupt" is that most consumer debt is "secured" - but with the perilous state of the housing bubble, this is not actually true. Last week, the consumer group Citizens Advice warned that unpayable sub-prime mortgages will "turn into a nightmare of debt and homelessness for thousands more vulnerable people."

House prices are crashing - asking prices were down 3.2% in December from November, housing website Rightmove reported, way down from the 0.7% fall in November. Prices in London, center of the U.K. bubble and of world capital flows, fell by an average of $56,000 in December, the worst in Britain. The Telegraph reports that the flow of funds into commercial property is down for the first time in years, and this will get worse.