to think that at least a house price crash would be a sliver of silver lining

(154 Posts)
yougottheshining Sun 26-Jun-16 20:59:12

I voted remain. I am beyond upset that we are leaving. However, if house prices in my area come down by 20% I could afford to buy. I'm not even that bothered about being a home-owner per se but I can only afford to rent because I get tax credits and housing benefit (despite working full time). For years I have been shiteing myself about what will happen to me and my kids when these top-ups stop, all the while being subjected to programme after programme about property porn, and headline after headline about how good it is that houses are worth so much money . I have had a permanent knot in my stomach about what will happen when my oldest hits 18 and we have to move to a smaller house because I will no longer get enough to house us all, and again what will happen when my youngest hits 18 and I will have to move to a room in a shared house, and there will be nowhere, I mean absolutely nowhere, for the kids to go. Because rents keep on going up, and I can't afford our (modest) house anyway on what I earn alone, and the only way around that is to buy, but I can't buy because I'm paying out so much in rent. I cannot explain just how worried I have been about this, for years. I really don't want to leave the EU. I have been crying and swearing around the place for the entire weekend. But actually I am in a fucking horrible situation in regard to housing and shelter for me and my family, so AIBU if one of the effects is that house prices fall to a level that will make it affordable for us to have a family home?

BeYourselfUnlessUCanBeAUnicorn Sun 26-Jun-16 21:03:11

Yes YABU. What about all the people who do own and would end up in negative equity. I'd be extremely annoyed if my house lost value and would lose us money.

I'm getting annoyed that people keep saying that a house price crash would be a good thing. No it wouldn't because less people would be able to sell due to negative equity so the supply wouldn't be there. Plus people will lose their jobs so they won't be buying either.

You situation isn't good and I can see why you would want prices to drop but a house price crash is NOT a silver lining.

katemiddletonsnudeheels Sun 26-Jun-16 21:04:59

I think the problem was always house prices rising beyond the means of ordinary people but (meant genuinely op) would you be able to get a mortgage when relying on benefits?

throwingpebbles Sun 26-Jun-16 21:06:10

Huge sympathies for you it is horrible sitting watching prices soar out of reach; I've been there

I think you know yab a bit though. I wouldn't wish negative equity anyone either.

BarbaraofSeville Sun 26-Jun-16 21:06:38

If there was a house price crash, mortgages would probably be harder to get so won't necessarily help people to buy.

Would a mortgage be loads cheaper than renting for you? Because if you're not getting housing benefit, you'd have less coming in to pay the mortgage.

yougottheshining Sun 26-Jun-16 21:07:59

Ok so what if there was some kind of contingency plan in place to bail people out who were in negative equity and needed to sell? I wouldn't mind at all if that magic £350 million (I know it's actually only around £125 million) was used. If people don't need to sell, it shouldn't bother them - I know there's the argument that they're paying off more money than they should but fuck it, I've spent around £60k on rent over the last 10 years to pay off other people's assets, so I have also spent way more money than I should. And I am facing the prospect that despite working and 'doing the right thing' [spit] I am unable to provide a home for my children. I don't want to end my days in a fucking bedsit when I've worked all my fucking life. I don't want my children to be homeless.

throwingpebbles Sun 26-Jun-16 21:08:29

Also, during the last crash lenders were much more jittery and it was much harder to get a mortgage. It was mainly cash buyers /those with lots of equity who were able to benefit and suck lots more housing stock into buy to let

ErNope Sun 26-Jun-16 21:08:39

1. No house prices falling in a price cash is NOT a good thing. Negative equity is very very bad.
2. You wouldn't get a mortgage anyway if you're relying on benefits, and if you're on benefits you can't save more than 16k (Nowhere near enough to buy even the tiniest of flats even in a crash) Without them stopping.
so you won't be able to buy anyway.
Sorry OP.

Osolea Sun 26-Jun-16 21:08:40

When your children grow up and their subsidies stop they could start earning and contributing it your rent.

Depending on your area, any house price crash is likely to be short lived anyway, there will still be more demand than supply, and most potential vendors won't sell while the value of their property is low anyway.

yougottheshining Sun 26-Jun-16 21:09:32

would you be able to get a mortgage when relying on benefits

OhYouBadBadKitten Sun 26-Jun-16 21:10:17

the problem is, if prices crash then building stops and the housing shortage continues.

yougottheshining Sun 26-Jun-16 21:10:38

I would yes. I've seen a broker and worked out how much I can borrow. If prices in my area dropped 20~% I could buy somewhere that would house us. As it is, I can't. And that's with sharing bedrooms etc.

BarbaraofSeville Sun 26-Jun-16 21:11:03

The OP doesn't say where she is in the country. £16k would easily do 10% deposit plus fees/moving costs on something like a 2 bed semi or 3 bed terrace in my city, even without a crash.

yougottheshining Sun 26-Jun-16 21:12:00

My kids are not going to be earning at 18, very probably - very few of them do. If they go on to uni, it will just be more expense and less money coming in. And nowhere for them to live in the holidays. How can I have them come back and stay with me when I'm in a fucking bedsit?

BombadierFritz Sun 26-Jun-16 21:12:36

If the economy tanks and house prices fall ...Your benefits would be slashed as the economy crashes and burns so you still wouldnt be able to afford that house. The only people who might are the cash rich - unless we get a cyprus style raid on savings.

yougottheshining Sun 26-Jun-16 21:13:37

And actually I'm not 'relying on benefits' as such - I work full-time. I claim top-up benefits because the cost of my housing is way over what I earn. While working full-time.

ErNope Sun 26-Jun-16 21:13:57

well yes, it would do a deposit (I meant it wouldn't buy a house or flat)
But Op will not get a mortgage while on benefits and if she did it would be a very very small one (ie would require a large deposit) sorry OP but I find it very hard to believe a mortgage broker told you that, considering benefits income is generally a no go as it changes over time. How would you keep paying the mortgage without housing benefit (HB doesn't cover mortgages)?
You might just about do it if your mortgage was v cheap/small, but what about when kids leave home?

ErNope Sun 26-Jun-16 21:15:41

Read wrong, I thought you didn't work (oopsy daisy I need caffeine) You stand a (slim) chance if you work too, but good luck all the same. Still being unreasonable I'm afraid.
I hear you on your situation being stressful.
I am in a similar position (Paying out too much on rent to be able to buy) Its crap. But a lot of the country is in the same position.

throwingpebbles Sun 26-Jun-16 21:16:41

Is there any scope to push your career and earn more (realise that isn't always an option!). ? Or to shift what you do to something that has scope for progression?

birchygoo Sun 26-Jun-16 21:16:50

No it wouldn't. I rented for 12 years and saved damn hard to get a deposit. Finally saved enough last year to buy. Have a high mortgage repayment. Am now expecting my first child - put this of until later in life when j had saved for my house. Was hoping to go part time. Now if interests rise I have no idea how we will afford it with childcare even if I go back full time. I'm devastated.

Also even if house prices fall, interest rates will rise and this may make remortgage payments to high for those that have lower incomes.

yougottheshining Sun 26-Jun-16 21:17:17

The bulk of my top-ups comes from tax credits. I'm not 'on benefits' as I work full-time. They take tax credits into account up to a certain amount - obviously, not to the same multiplier as wages, but it is taken into account. Obviously the housing benefit will go - I'm not so fucking stupid that I don't realise that. But I won't need that if prices drop by 20%.

Andbabymakesthree Sun 26-Jun-16 21:18:19

Have you looked at discounted affordable homes ( not part ownership)

throwingpebbles Sun 26-Jun-16 21:20:40

birchy any chance for you and/ or your DP to do compressed hours or similar to cut the amount of childcare you need relative to hours worked? That's how I kept childcare costs sensible relative to salary.

I know it's shit, and stressful. But if you search old mumsnet threads etc you will find lots of us finding all kinds of different ways to do the best we can with the situation.

yougottheshining Sun 26-Jun-16 21:21:12

It's not just that I'm paying paying out too much on rent to be able to buy. It's that the rent is so high that I can't afford it on what I earn alone. I've been on the council waiting list for 10 years so I'm not going to get a stable house that way. As I can't afford the rent on where we live on my wages alone I'm not going to get a stable house that way either. If I bought, we could. But we can't afford to buy because prices are so high. If they dropped, I could afford to provide a long term secure home for my family. And actually having worked since I was fucking 14 years old (ok, so that one was part-time, but still) I don't think that's such a massive expectation to have.

witsender Sun 26-Jun-16 21:22:03

Depends. People would have to be prepared to sell in order for you to buy...I certainly am not planning on selling especially if prices drop.

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