Some CoffeeHousers have asked: is it so surprising that the sub-prime crisis is concentrated in poorer areas? Of course not, but the Experian data which George Bridges provides for us shows in clear focus just how unevenly it’s distributed. For a while in the credit bubble, you could hardly turn on satellite television without seeing adverts saying “CCJs? Been refused credit before? No problem”. For the middle class, the credit bubble meant cheap lending rates and, ergo, extra spending money. But their asset-to-loan ratio broadly stayed within manageable levels. It is in the poor areas that they were led into believing in a new era of low cost credit had arrived, and asked to borrow accordingly. It is such households that will have the most problems in remortgaging, and may be forced to sell.
For the constituencies at the bottom end of Experian’s map, the credit crunch will mean downgrading summer holidays, delaying house upgrade projects etc. But for others, it will mean losing their homes. The Experian map throws this dichotomy into sharp relief.