Thursday, November 02, 2006

Highly Creditable

The news that a lender in the UK is now prepared to offer suitable candidates loans of up to five times their annual salary in order to be able to buy a house, fills me with awe and wonderment.

It’s not just the fact that five times my salary would only get me a share in an outhouse in one of the grubbier suburbs of London, but that there are those in this world brave enough to take on a task of such magnitude. Britons, never, never, ever, shall be slaves – except, of course, to a bank.

Fortunately, I don’t need a mortgage, but in my case, the application would be fraught with difficulty, I feel.

“Well, sir. What is your annual income?”

“No idea.”

“But you must!”

“No, I mustn’t.”


“Well, it all depends how many people pay me. At the end of the year I try and add it all up……if you’d care to wait until then, perhaps?”

Of course, I understand you can average this sort of thing out. You know, you take the last few year’s figures, if you can find them, tot ‘em up and divide by something or other to arrive at a result. But I was never any good at arithmetic.

And the idea of actually owing all that money to some institution whose help line is in Bombay or Bangalore is a pretty scary one. A conversation with them on the subject of your not being able to cough up this month could be a little tedious. A bit like Tony Hancock in the Radio Ham.

When I lived in England, back in the stone age of credit, when needing a touch of an overdraft, you called up your friendly bank manager, invited him out for lunch or a beer, and the deal was done with the minimum of fuss or formality. Indeed, if you forgot the transaction, they would send you a polite letter suggesting that it was time to revert to the original arrangement, wherein you banked with them, and not the other way around.

But I don’t feel that someone who’s just let you off the leash with a loan of five times your annual salary is going to be quite so complacent in the event of something going wrong.

I was brought up to view debt and hire purchase as one of the evils of the world. I have since added television to the list as a personal statement. My father had the quaint old-fashioned idea that, if you wanted something in the way of material goods, you saved up until you could go and plonk the cash down. Admittedly, with a house purchase, that’s difficult, unless you happen to be in the dope running business or similar occupations that are now encouraged by the constabulary, so he did indeed have a mortgage. I believe it was less than twice his annual salary and he was a civil servant with about as secure job prospects as anyone can get, other than John Prescott.

I was about to say that I have no debts. But then I remember an incident many years ago when I worked for a while in the UK. As I was being paid in Sterling, I opened an account with a bank there, who shall be nameless, just in case they’re reading this. As part of the deal, they issued me with a Cash Card enabling me to get spondulicks out of the fancy new automatic teller machines that were now sprouting up like mushrooms overnight.

When I left the UK, I maintained the account as a convenience and rarely bothered to see how much was in the balance, just topping it off when necessary. One day, whilst waiting at an airport in some obscure place in The Caribbean, I spotted a cash machine and, in a spirit of enquiry, used the card to try and get a balance. This proved impossible, so I then tried to draw some cash as a test. To my surprise, it delivered $200, more than I reckoned was in the account.

Some weeks later, I received a missive from the bank, telling me that I had an unauthorised overdraft. I wrote back and said I had not. They wrote back and said “Oh yes, you have. When you drew out that $200, there was only $185 in the account.” I wrote back and said that was tough luck, they shouldn’t have dished it out. And I had never asked for an overdraft.

Well, as things happen when you are dealing with some automaton in the Central Computer Centre, which had now replaced the friendly local bank manager who should have been guarding my $185, things went downhill rapidly from thereon.

Letters flew, I was going to say back and forth, but in reality it was a one way street since I never replied. And the final straw was when they placed me on their “black list,” adding in threatening tones that, even with that dreaded punishment hanging over my head, I was still liable for the interest that was accruing on the $15 I had chiselled out of them.

It’s been a long time now and I hope they may have forgotten the incident. But to be on the safe side, I don’t think I’ll be applying to them for a mortgage, even if I could work out my average earnings.

And the interest must be building up – it will probably be reflected in their annual balance sheet.

So now you see why I regard anyone borrowing five times their annual salary as being incredibly brave – or incredibly foolhardy. But didn’t the Prime Minister do something similar when he bought his mausoleum in London?


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