to feel seething resentment towards those who profited from the house price bubble and hot anger at the Governments who allowed it to happen?

[TartyMcFarty]

You'll have to forgive my naivety here - I'm ranting about something I don't really understand.

DH and I are stuck. In 2006 we bought a (modest) property on a 100% mortgage. Foolish in hindsight, I know, but based on the advice of our IFA, the unshakeable faith of our families and society that property ownership was the way to go, and the increasing pressure at the time to get on the ladder or miss out, that was the decision we made. We then found that the lender, bastard bastard Northern Rock were unwilling to remortgage based on our lack of equity, despite us having overpaid by several thousand pounds. We couldn't shift the place, and with the agreement of a different IFA, remortgaged against the equity in my DM's property (love her!). It gets more complicated than that, but that's all that's needed here. Now we still can't sell it , our tax credits have suddenly disappeared, my pension contribution has increased (DH doesn't even have a pension) and the tracker rate is slowly increasing. We're on interest only, and as I'm part time since the having DD, with another DC on the way, there's not much of a cushion.

What's really angered me over the last couple of days is the dawning realisation of how people just a few years older than us have profited from the massive increase in property 'values'. I'm still in touch with our ex-neighbour. She bought seven years earlier than us, sold at £120k profit after 10 years (this is not London!), her partner was in a similar situation so they have ended up comfortably in a property of twice the size, renovated to a really lovely standard. Obviously my resentment isn't directed at them personally - they're good people, have profited from a stupid market and good luck to them - but it's just an illustration.

How can we possibly hope to survive in a property market that boomed by more than 3.5x in this instance alone? We can't even afford to maintain our own home to a good standard. Pay isn't moving at all, and we're currently looking at less than .75 of a pension between us. I can't even bear to think about how we'll support our DCs through HE, and the risk to my DM's home if interest rates shoot up.

I just need a rant. Those of us stupid enough to be sucked in at high LTV rates towards the peak of the market are fucked all ways, whereas people just 5 years older than us are untouchable. I know I've only given one example for which I know the exact figures, but there are others I can think of in the same lucky situation. There just doesn't seem to be any point in trying when you compare our situation with those who profited so enormously in the 00s.

OP its coming across as jealousy, not resentment. Look at starwishers post. How much did you have to pay just to attend uni?

The thing is though - all those people talking about how it's so much harder for us because house prices are so high, and how we'll be working harder for longer to pay it off...you don't have to buy at that price. No one has a gun to your head, saying you - buy a property in a grotty area for well over the cost, now!

It grates on me that a mortgage for a two bed house in the area I live would be less than the rent I pay for a less than great flat. It's that bastard deposit that prevents me because if the bank actually spoke to me and looked at the last ten years of my finances, they would see I have never defaulted on what could have been a mortgage but was rent instead.

But as I posted before...I personally feel I would be a complete mug to buy at London prices now. After several years of being so upset about this unattainable thing, I'm now doing a U turn and wondering if I had a lucky escape. A few years ago, if I could have done I'd have bought in London. At any cost. Now I just feel like I'd be a cog in this mad machine and saddled myself with something huge and to what end? It's crazy and now I'm seeing the value in moving slightly further out for less cost. As long as the high deposits are required it's still unattainable for me, but I feel like I dodged a bullet not buying into that "dream" of home ownership where you're being completely shafted buy ridiculous prices everyone else is buying into.

Some of those people who profited may have waited 10 years in grotty bedsits for the prices to come down, like dh did. It didn't take any kind of sneaky insider information to realise that prices would boom and bust- just knowing what the 80s and 90s were like- and that knowledge was available to anybody.

Don't forget that a lot of people who waited until the favourable moment did so because they had to- dh was far too poor to get a mortgage during the boom years. It meant a 10 year long distance engagement until we could afford to marry (in the days before skype, emails and cheap phone calls, we wrote letters because that was all we could afford). Is that the bit you envy us?

YellowWellies, a couple more things I would like to say.You said that you are surprised people dont do more research when buying a house. Trouble is, finance is seen as an alien language by the vast majority of people. Even those educated in other fields often say that their grasp of maths is awful.And they then understandably rely on "the experts" such as banks and financial advisors.
And the media.Do you think the media is "bought" in some ways?
Also, as have mocked Labour and Maggie, and I most certainly dont want a political debate, but are there people we can vote for who will and are able to change things, in your opinion?
Thanks, and feel free anyone else to answer please.

One of the things I find astonoshing is the fact that people have re-written history in their minds and suddenly the only ones who knew that the prices were unsustainable and a crash was coming were Oracles with the powers of Mystic Meg as opposed to this possibility being discussed in any half decent newspaper.

The point about 15% interest rates doesn't even anything out from where I'm standing. 15% on a £30k property is more affordable than 6% on £150k

OP you havent got a clue have you? You are comparing 15% on a 30k property in 1992 on a 2012 salary.

What we are talking about here is an interest rate hike 20 years ago when salaries were significantly lower. And we are not just talking 30k houses, i bought a flat in 1994 for £28k, that was pretty cheap for the time.

We are talking about a 15% interest rate on properties for £80-£90k outside of London. That, OP, was significant for the time. I can remember colleagues in 1991/2 absolutely distraught because they thought they were losing their homes.

At the time i was 19yo and didnt own my own property but i never forgot it, hence why i took out a mortgage two years later on a property approx 2.5 times my salary rather than the 3.5 i was offered.

Please stop this seething resentment about something you clearly dont have sufficient knowledge about.

15% was for one day everyone had a heart attack and the rates were brought down again very quickly.

Interest rates were only 15% for a few days iirc. Also not everyone was on a variable rate mortgage.

Housing costs now are a higher proportion of disposable income than at any time post-war.

I know but they were still staggeringly high as Jajas said. I am just highlighting this as the OP thinks that this was ok as the mortgages were lower.

Definitely not, when I bought my first place in '96 we were pleased we got 7.9%, rates of 8.5% were much more common.

www.bankofengland.co.uk/boeapps/iadb/Repo.asp

As gruffalos child said, I am finding this thread a real education. Fascinating.

Back then they took no prisoners if you couldnt pay you lost your home.

So how many of you agree ghat a huge house price crash is imminent? I read the list of points made by I think it was yellowwellies but I think the thing you were missing out though, one factor which is keeping thm high, is the shortage of available housing. The population in England is huge especially in places like the south east and there are nowhere near enough homes. Do you see this situation changing?

MarthasHarbour, please be a bit gentler. Probably 90% of the general population do not have much of a clue about these matters.It is not their fault.The op knows she does not have suficient knowledge, who does?She is trying to learn. We all are.

Ahem - how many months did you pay your mortgage at 15% - none? one? Don't cite that hyperbole - it detracts from your argument. Even paying at 8 or 9% (the former is historically the long term average interest rate in the UK, so tells us how far we are from normal today) - I'm guessing you weren't foolish enough to sign up to these terms for the entirety of your 25 year mortgage? No? You maybe paid this for 5 years max? I think also you seem to be imagining vast amounts of subsequent wage inflation to argue about how hard you had it on low wages back then. Average wages have risen just £6.5k since the 90s yet house prices have risen 300% - so no it really is harder today. Twice as hard. See the calcs earlier in the thread. 12,000 hours of labour for the average worker to buy the average house compared to 6,700 hours back in the 90s.

To be honest the forbearance we are seeing from the banks at the moment isn't 'helping' anyone. The reason they are not repossessing is not because banks have suddenly turned nice and caring. No, if they repossess and flood the market with repossessions (a la the 90s) then house prices will crash into a big black pit - and take the banks down with them. The banks are much, much more exposed this time (because they thought they could package up the mortgages as derivatives to trade on the markets and counter the risk that way rather than credit checking the folk they were lending to - CDS - but it turns out that was balls). So by not repossessing they are just dragging the misery out. I mean economic conditions are not going to improve, so keeping the cost of living artificially high is helping no one. I'm guessing with the end of SMI we are going to see the banks being much less lenient on people. There is also a bit of a Mexican standoff going on. None of the banks wants to flood the markets with repos as it will make the market tank - but equally none of them wants to be left with dozens of overpriced assets on its books when the market does tank. None of the banks wants to be the first to flood the market with repos but you can be damn well sure NONE of them wants to be the last left with a bunch of comparatively worthless assets. If the market did tank, yes it would hurt those who bought right at the peak (though to be honest bankruptcy might be the better option) but it would also hurt the paper wealth 'my house is my pension' brigade. Can you imagine the furore?

Finally as for the 'we all knew that house prices go down as well as up' well yes that might be the case from your vantage point of wisdom and seeing other crashes. Is there any particular reason why asking prices are now at a record high despite months of selling price falls? (The distortion incidentally being most notable higher up in the market, so this isn't first time buyers trying to price to avoid negative equity). That would be all of those sage folk aware of house price falls being reasonable human beings would it? Or lets be honest, isn't it just greed? It turns out that it might be them now, who has missed the boat doesn't it? Paper gains are only profits when you sell the house and realise them. There are a lot of folk who have made 300% gains over the last decade but now they are coming to sell they have dug their heels in 'determined not to give it away'. Perhaps they ought to have done some more financial planning for retirement rather than just relying on an asset bubble. I think a lot of people are going to learn the meaning of the phrase 'catch a falling knife'. Average asking prices are now £80k above average selling prices. www.thisismoney.co.uk/money/mortgageshome/article-2130391/UK-house-prices-Asking-prices-hit-time-high-says-Rightmove.html

I don't resent people buying at a good time but I don't like the fact that so many people are part time "property developers" who, because they were in a position to get mortgages, bought up so much housing and now rent it out. I don't understand why people are encouraged to buy up all the smallish affordable homes, paint them magnolia and become landlords. They then turn into the people who call a house a property and refer to themselves as myself. We bought at a bad time and can't sell due to monstrous co freeholders, we have had to keep the place on even though we live abroad so have to actually send money back to cover the mortgage after the tenant has paid his rent. We would have much rather cut our losses and sold.

It strikes me that there is no such thing as a free lunch - and those with paper gains today are either ripe targets for taxation from a skint treasury or sitting ducks for a crash. If I'd have been in that position I'd probably have quit whilst I was ahead - which makes me much more evil than those who bought those homes to live in!!!

Oh theo don't get me onto pwoperdy developers. Repellant folks!!!! Hmmm how can I stoke this asset bubble and price the young out of an essential commodity so as to aggrandise myself? This country would be a damn sight healthier if the money wasted on the property ponzi was actually invested in useful productive ventures.

amillionyears its the 'seething resentment' that is getting a lot of backs up. i think your figure of 90% is rather high.

Although I do agree with you that there is a generation who will not know about the early 90s inflation hike, fair point, but it is nowhere near 90% of the entire population. I do think that taking out a 100% mortgage requires a little bit of homework though. But agreed, the OP wasnt the only one in this situation, it is just a shame she seems to be 'seething resentment' against the earlier generations for her lack of knowledge.

V true Martha not a good choice of words but she admits herself to being stupid to be sucked into the hype. We also need to consider how the media is now biased towards rises. They are blasted all over headlines as good news when houses get less affordable - that's just f*cked up surely? Even the BBC reports the issue in a distorted way i.e. expensive = good, affordable = bad - which is fine and dandy if you want a nation of debt slaves tied to the bankers forever.

I don't buy into this 'we saw it coming' bollocks either.

We bought our London house in 2005. We paid a lot for it but had made £150k on my flat which had nearly doubled in 6 years.

We wanted to get out of London when I was pregnant with DS2 in 2008. Unfortunately, the whole banking industry went tits up and house prices were free falling.

We sold at the price we'd bought it for, terrified of being trapped for years. This was a reduction of £250k off the valuation in 2007 .

However, we did what was best for our family, despite the appalling timing.

EVERYONE and I mean EVERYONE told us that we were doing the right thing, that prices were only going to fall more and were going to take decades to recover. That city bonus culture was over and the London market was in turmoil. This was financial advisor, estate agent, friends, press even Mumsnet

But low and behold, interest rates were slashed a few days after we exchanged, bankers went on as normal and 3 years later out house would have been snapped up for £300k more on its first weekend.

I don't regret the decision as it was right for us but really resent the timing, and all those who say they could tell what would happen.

So what the heck is wrong with providing affordable housing to people who can't afford to buy then?

We've been landlords, on and off for about 15 years. Yes we develop properties in that we make them liveable - what exactly is the problem with fixing up the damp and the windows and then renting them out. Would you rather people were homeless. Not everyone can buy. Sometimes people are in a state where they only need to live somewhere a year or less - because they are going to get married or have kids or move jobs and they need somewhere now. The ownership model does not work for them.

And no there will be no price collapse. There is not enough housing so there can't be. Unless we have a major epidemic which kills all the oldies and frees up housing things will remain relatively stable. Simple economics says so.

It makes me a bit annoyed that if I make a hotel and rent out rooms that's fine and dandy but if I make a home and rent it out to someone who actually wants to live there, it's considered somehow morally wrong .

There is no problem with that in itself - but that the system is geared in landlord's favour. Gordon Brown actively told everybody to invest in property rather than pensions and they did.

And when you get tax relief on your interest payments, and maintenance and decoration, and homeowners don't than that gives reall incentives to see houses as investments and keeps prices artificially high.

Get rid of the tax relief, and asking prices will come down, despite the demand for housing.