Reply #17: This is the field I happen to work in.

[Taxloss]

I am a freelance journalist, but approx. 60% of my work time is spent on a campaigning, investigative magazine run by Shelter, the homelessness charity. Shelter's focus has shifted in recent years towards poor housing, rather than street homelessness, as poor housing is a far greater social evil. Indeed, Shelter's director, Adam Sampson, used the word "Dickensian" to describe the miserable conditions that something like a million children find themselves in. A million children. Think about that figure for a moment.

Anyway, we are presently in the midst of a major investigation into the inherent vulnerability of a whole tier of those homeowners that politicians are so keen to create.

Here's the jist of a very complex story. From 1997 on, the Bank of England kept Britain from slipping into recession by encouraging a consumer credit boom and house price boom. And it worked very nicely. Britons now carry £1.1trillion in debt - that's private debt, not government debt. The figure passed the trillion mark for the first time ever in March.

Now, I don't want to get into the mechanics of this, but basically this debt is being maintained by credit card debt turning into debt secured against your home. This is creating a new class of super-vulnerable homeowners who have not one loan against their home - the mortgage - but two or even more. If they get into financial trouble of any kind, the secondary lenders always act first because the primary lenders get first dibs on the proceeds of the sale of the house, so it's in the interests of the secondaries (generally sub-primes) to act. So if confidence in the credit market slipped, an increase in possession orders - the start of court proceedings that may result in the repossession of your hom - would be the second warning "blip" on the radar. An increase in insolvencies would be the first blip - that came in spring. laster month possession orders spiked upwards - 66% on the same quarter last year. Other warning indicators are trembling into the red.

Now, everything will be OK if house prices continue to rise. Not "don't fall" - staying still won't work. Also, interest rates must remain low. Which means the pound must remain high (ouch, exports) and inflation must remain low (isn't petrol pricey nowadays?).

To cut all this short, like any Ponzi scheme the last in will be the worst hit - the most vulnerable homeowners. We are creating a generation of extremely damaged people who will be in hock for the rest of their lives.

Questions?