to think most people benefit from banks?

[chandellina]

and to be so fed up with banker bashing.

Will Hutton on Dispatches (Channel 4) has revealed the shocking fact that banks have been making 75% of their lending in the form of mortgages, which his researcher goes on to say is a socially useless function for the economy.

How is it socially useless to allow people to borrow to buy their own homes, and doesn't it inherently make most people net beneficiaries of the financial system?

And where would this country and its inhabitants be without its housing wealth?

All this nonsense about banks holding the country to ransom completely sidesteps the enormous benefits of credit in modern society.

"And where would this country and its inhabitants be without its housing wealth?"

In affordable rented accommodation close to where they work, probably.

tethersend, i'm not saying that wouldn't be better. nevertheless, the common wisdom is that renting is dead money and we should all take out debt up to our eyeballs to buy.

more broadly, my issue is that everyone loves to hate bankers and blame them for the country's woes, while very much having enjoyed spending cheap credit and fueling the boom before the bust.

Good god chandelina, do you think that banks were altruistic institutions handing out credit for the good of the people?

Or do you think there may have been something in it for them?

not at all, just that we'd all be pretty screwed without them and have lapped up the benefits of their financial alchemy. yes, we have paid a price by bailing three or four of them out, but will probably make a profit off it.

never mind though, maybe the mood has passed. no one cares anymore.

I, for one, am very grateful to banks for lending us the money to buy our house, and also for handling our day to day finances.

People spend about 25 years paying off a mortgage, most of this is interest on the loan itself, this is how they take advantage.

Well, without the banks, we'd all probably live within our means. Which would be no bad thing.

it would be well beyond the means of most people to save up in advance for everything. credit is a great equaliser, for better and worse.

Say a house costing 200,000 costs 1k a month, this is 12,000 year, times it by 25 years this house is really costing 300,000, the bank makes 100,000 profit on this.

oh god yes, belle - and £30 for saying no to a direct debit if your wages went in late or you were daft enough to have the money in the wrong account. ahem.

ok, my fault - but £30 to do nothing? £30 to say no?

And they hold our money, and make money from our money, and what do we get out of it? a penny or two interest and lots of bank charges, for running our account.

Hang on. You've got our money! You're making money from the use of our money! And on top of this you charge us a monthly fee for you using OUR money!!!!

(By 'you' I mean The Banks)

And they go to the government for money - taxpayers money - when their irresponsible behaviour lands them in the shit and continue to behave the same way!

How many times must we bend over and get taken up the arse by bloody banks?!

Well, it's for worse, imo. Have what you can afford. Go without what you can't afford.

Or have what you want today and pay triple over months or years. Because everyone just has to have everything right now.

There is nothing wrong with saving, nothing wrong with not having something.

I'm talking big tvs, fancy cars etc.

Most of the things people get on the never never are not things they need. They are things they get greedy for because credit is so available.

Don't forget that little black hole where your money goes into when you transfer it from your account to another bank. It takes my rent 4 days to go from Barclays to Lloyds, despite the banks saying they will speed it up. Where does it go? I don't get the interest, nor does the agency. Alot of accounts are also basic accounts so the customers don't recieve any interest at all, the banks make money off this no?

I am actually better off and more content having escaped from the housing ladder. I can live where I want in a beautiful home rather than the box I could afford to buy.

The bank is not making a whole £100k profit, belle. Most of it goes to the Bank of England. The banks don't get their money for free.

thanks hecate for serving as the voice of the people.

but you are admitting it's your fault if you overdraw without authorisation, and you can shop around for a bank that charges less in that instance. or be more responsible.

i love personal banking in this country because it is actually free, unlike most places.

I think most of the profits made by the banks are not in the branches? IIRC, it's all investments rather then loans/current accounts. They don't exactly do alot for their customers though, those with a lower income suffer more.

compared with doorstep lenders and cheque cashing places frequently used by lower income people, the high street banks are altruistic.

hahaha love your bitchyness. I can practically hear you meow.

Voice of the people.

No love, just my personal rant.

And nobody has been more irresponsible than the banks!

Hell yes it's my fault if I have the money in the wrong account. Fair enough. And I would be more than happy to pay any costs incurred by the bank for my mistake.

If it costs them £30, £20 or even £10 to reject a direct debit I will bare my backside in the co-op window with a rose where the sun don't shine.

They take the piss.

Banks help people?????
Huge interest on loans and mortgages, ludicrous charges on tiny overdrafts, lending people money they can ill afford, helping mess up the economy....

you can currently get a 15 year fix at 5.3% - not exactly huge interest. i agree overdraft charges can be outrageous, but frankly they help keep the system free for the people who do stay within their limits.
if people can't afford to repay a loan they shouldn't take it - it is the borrower's responsibility to repay, not the lender's to extend. (primarily)
messing up the economy - well, we (the people and governments) fueled and endorsed their recklessness.

"How is it socially useless to allow people to borrow to buy their own homes....
And where would this country and its inhabitants be without its housing wealth?"

Well, since house prices have become totally disconnected from average salary the push for home ownership has contributed to the shiteness of life in the UK with us all working like dogs to afford the essentials.

I've been trying to work out when it was that people began to see their houses as cash machines.

I believe that bankers should have social responsibility.

People shouldn't borrow beyond their means but if you have ever lived in poverty chandellina then you would have an inkling of why people do.

I agree lowenergy, I am so glad we have turned our back on the housing market. Dp wants to buy again but I am hoping that it doesn't happen.

people live beyond their means for many reasons. need, desire, greed, status, because they can, because it's considered normal.

should all private businesses be socially responsible? are they?

i think people started to see their houses as cash machines in the late 90s, when the economy picked up and there was an onslaught of property programmes, the rise of the BTL investor, etc.

it just kept on going because money was cheap and the idea that house prices could never fall and the UK would never have enough supply was being constantly drummed into people's heads.

sadly, even after a dramatic fall, that mentality dusted itself off very quickly and is back in full force.