Bailing out the squeezed middle's mortgage repayments?

[EveSix]

Listening to Any Answers and feeling frustrated, but wondering if I'm missing some nuance.

A caller is advocating for government bail-outs to cover mortgage payments for home owners impacted by recent hikes in interest rates.

I feel a sort of existential exasperation at this idea.

I absolutely understand that times are tough, and that we form strong attachments to the buildings we live in and the choices and advantages that a certain income affords us: holidays, the ability to have savings and university funds for our DC, as were mentioned in the programme.

I understand that there is, what some would argue, a precedence for such a bail out in terms of recent quantitative easing, furlough payments and schemes to support businesses following the pandemic.

But home ownership is a massive privilege in itself, in a skewed growth economy that encourages profiteering from the basic human need for shelter.

Home 'owners' don't own their mortgaged houses; they owe money to the financial corporations which will be the ultimate beneficiaries of such bail outs.

Does the squeezed middle need bailing out? It seems ludicrous to me. People have been permitted to overreach financially. Surely, the remedy is to spend our own assets first; use our savings; the rainy day did come. Move in order to downsize or relocate to a cheaper area; we're not tethered to the building we currently call 'home' if we no longer can afford it.

The caller asserted that "...life is for living!" by way of explanation why scrimping and cutting back feels like deprivation.

What am I missing?

But that's why I fixed for the duration of the childcare years. Everyone said interest rates would go up, fixing was a way to protect from that

I have a mortgage and would not support this. My mortgage even at the higher interest rate is much less than I would pay to rent a comparable house.

I think the people we should probably bail out are the low wage homeowners to be honest.
plenty of minimum/lower wage families who own, don’t get help from uc due to owning
dont overstretch at all, but who will lose their homes
if we can support them to stay in their homes we won’t worsen the housing crisis.
we won’t have all those people in line for social housing we won’t have those people homeless

@SweetSakura , unfortunately having children doesn’t always happen at the time you plan when fixing mortgages , even for the one at school, childcare fees are not cheap.

This! A bail out will just elongate the situation, prolonging the pain for people who won't benefit from it (i.e. people far less privileged than the 'squeezed middle')

We have a great household income, but all our bills can be covered by one income. This is by design because although we are comfortable we are certainly not extravagant. At any point one of us could get sick, have an accident, die, lose our job etc etc. You'd think the pandemic would have made people more cautious!

That being said, I do feel desperately sorry for people on lower incomes who have no choice but to live month to month (i.e. those on teacher or nurse salaries or single mums where the ex has sod off and the state does feck all to chase CM), yet despite all odds have managed to buy their own home. Those people deserve help.

But the people who have bought houses at the absolute top end of affordability, who spend every penny they earn (out of choice) instead of saving some just in case... i.e. the majority of people currently kicking up a stink. No chance!

You fixed for the duration of the childcare years?
even after DD starts school paying my childminder 7-9 am and then 3-6 so that I can work full time is just under 150 quid a week. That’s 5850 for the 39 weeks of term time then it’s 300 a week odd for the nine weeks she’s off and I’m working about 2700 so that’s a year 8500 for the school years reception until y6 after I’ve paid for the first four years at 300+ quid a week totally about 15.5k a year!!
i didn’t see 12 year fixed rates anywhere when we took out our 5

lets eat the rich

While I don't support a bailout, I do think it's slightly unfair to assume people stretched themselves too much when interest rates have gone up massively, incomes have plateaued and there's a cost of living crisis. My mortgage has increased by £500 a month. I can afford it, but that's a lot of extra money to find every month when my salary isn't going up but my bills are.

I'm much more concerned for private renters in this high COL situation. The discrepancy between the amount of 'allowable rent' payable in my area and the cheapest rental available (which would probably not even be considered because despite it being illegal to discriminate we all know they will find a way around it) ..

So my area, rural south east. 'Allowable' rent for a 2 bed is £900 and cheapest actual rental is £1300 meaning that someone living with one child who has say MS ... will be entitled to :

£368.74
£315.00
£390.06
£897.00
£172.00 higher rate for severe disablement

-- £2142.80

Minus

£1300

Leaving £842.80 for a single severely disabled parent to live on for. Month. With all the cost of getting a child to school rurally increased heating due to health needs and we haven't even considered gas, water, and food.

This is who I will save my main heartache for. People who are truly truly up against it .

I took a 10 year fix. It seemed the sensible prudent choice.

We are not being bailed out. The central banks have caused this by printing trillions of pounds, devaluing the fiat currency and inflating prices. No you shouldn't be paying the banks your savings because they raise debt interest to pay for their effing failures. Inflation is hidden theft simple.

You could equally argue that interest rates have been artificially low for too long, "stealing" from people who need an income from their money.

@SweetSakura , did you also manage to time the fixing of your mortgage with the birth of your child. Because that’s luck!

the young couple I know getting on the housing ladder recently have all overstretched, buying beautiful 4 bedroomed homes as a first home. Whatever happened to making do with less until you can actually afford it?

I did the cost affordability up to 10% I think ten years ago. However that didn't factor in vastly inflated food and fuel.

My car is also ten years old and I think that pretty normal. Not every homeowner is delusional and entitled. I did the hard pinch when we bought. Time made us comfortable in repayments. I do pity those starting out right now.

I'm not keen on bailing private companies out full stop. But neither think race to the bottom is the answer. If it was then there's no point in anything including education.

No you couldn't EQUALLY argue. And who set the interest rates that low - central wanks I mean banks. Wake up people.

My situation is that I'm a single parent and at the bottom of the property ladder so while I have my own (mortgaged) house I have no scope to downsize. If I had to sell and rent it would cost more and I'd be entitled to help with rent via universal credit which I can't get for the mortgage so on both an individual and national level it makes no sense for people like me to lose our homes. I don't think anyone should actually, I'm talking purely in financial logic here.

Bail out - no, we all need to take personal responsibility for our own finances.
Encourage banks to discuss interest only or longer terms to prevent repossessions -HELL YES.

No the great unwashed poor are already being bailed out… and will continue to do so because there is no incentive for them to get off their lazy arses and work more than 16 hours a week, the poor wee lambs!

I do wonder where the bar would be set for help, because everyone's mortgage has gone up. For example, is it fair to people who have saved and used that money to ease their mortgage burden to miss out, whilst others are given money by the government? Also, for those in dire financial straits - would there be different provision to those on high incomes with high mortgages vs those with smaller incomes and mortgages, even if the change in their fortunes is proportionally the same in terms of reduction of discretionary income? There are lots of questions. Too many, I think.

I'm the same we bought a modest house. We were advised we could borrow a fair amount more but Thank god we did not !!

Even though our house is modest and bordering on small we will still really struggle when our mortgage goes up if it's a lot

Ours is due for renewal in a year. Currently I do not have any sort of a life as I have 3 jobs and every spare penny is overpaying in a bid to mitigate what a disaster it's Gona be

Very easy to condemn squeezed middle when you are not one of them. (For the record am not currently one of them, but I could be in three years if one of us was to a lose a job - v difficult to predict every future).

The real issue is the banks trying to fix inflation by interest rate rises that really only affect this squeezed middle. If they're the main ones impacted but they're not that big a group, it's not actually going to fix inflation after all. What will they do then? Keep raising it? Keep watching people lose their homes? It's unsustainable.

I agree, it would be a huge shame if someone lost their home over a temporary problem so there should be government support but definitely by way of a loan not a grant. This shouldn’t be a remedy for people who don’t want to dip into their savings, people should be paying it back when they are able

Everyone said interest rates would go up,

Who did? Because the banks & boe didn't see this coming!

Agree with this

There’s no living the high life
There are no savings!