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BSA warns of rising consumer debt dangers

BSA chairman Graham Stowe and FSA managing director John Tiner last week warned members of the Building Societies Association of the dangers of consumer debt exposure.

Speaking at the BSA annual lunch, Tiner told members: “Borrowers should find it easier to service high levels of debt while consumers continue to benefit from discount borrowing, but if house prices stopped increasing servicing debt will be more difficult for borrowers. Lenders are likely to be exposed to more arrears and defaults so it is important that, at the application stage, people&#39s ability to repay is borne in mind.”

Tiner warned that any slowdown in rising house equity would affect first-time buyers and borrowers with large levels debt in particular, urging lenders to be especially careful to look for borrowers over-exposing themselves on ability to pay.

Despite pointing to considerable successes for the mutual sector – with outstanding mortgage commitments at the end of September up 39% from last year – BSA chairman Graham Stowe urged caution, pointing to parallels with the housing market crash of the late 1980s.

Stowe told members: “It is with some trepidation that I venture an opinion on future developments but some things are clear. Firstly, the overall level of house inflation will come down, as the current rate of increase is unsustainable. Secondly, it is unlikely that interest rates will rise to 15% again.

“However, overall levels of personal indebtedness are extremely high and, one day, that debt will have to be repaid, out of incomes that are not rising very rapidly.”

Stowe also warned regulators that the Financial Ombudsman Service must not become “regulation by individual complaint”, following recent controversial decisions on product pricing.


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In Focus — May 2015: private medical insurance market in Germany

Welcome to the latest edition of In Focus. In this issue, Jelf examines the private medical insurance market for employers with expatriate workforces in Germany. This includes the common challenges faced in sourcing appropriate coverage, along with a selection of available solutions. This will be of particular interest to HR/reward decision makers with employees based in Germany. It will assess the cultural norms, risks and backdrop that are relevant to organisations with expatriate staff in this location.


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