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.

YANBU. I'm 26, a graduate working in the public sector and if DH hadn't owned a property when we met (ex council, had lived there all his life) there is no way I would be on the property ladder now. Unless you have parents willing to support children into their mid-twenties while they save up a 10k minimum deposit (I certainly didn't) or you inherit or luck out as my DH did, you don't stand a chance.

Also worth bearing in mind that there is also reduced demand from landlords.

All those amateur people buying up terraces on BTL mortgages have run like the wind, investing their money in gold, shares or just deciding to spend it as it is no longer 'spare' cash.

It does not tally that one house = one buyer

There do look to be two types of people on this thread:

1. those that bought in the 90s and earlier and don't see what the fuss is about: "hey I worked hard, it wasn't easy, but work = reward therefore stop whining"; and

2. the priced out "what the hell is going on you don't know you're born" who couldn't buy due to their birthdate.

I really don't think the luckier ones will ever 'get it' any attempt to explain it to them is seen as sour grapes. I know it is difficult to dislocate work from reward for most, as that is a central belief of our society but suffice to say that that mechanism is now broken. You can indeed now get top grades at school, an amazing degree, a well paid job and still have nothing to show after working for a decade other than, maybe, maybe a reduction in your student debt - and fattening some landlords pockets. There is no wonder so many are migrating.

The point that those sitting on paper gains really struggle to accept is that if they did exactly the same, worked just as hard, but from a starting point 10 years later, the result would be completely different. They too would be priced out and resenting those sitting on paper gains. They will NEVER accept that.

I guess it's human nature to like to blame our successes on our nous and acumen and to dismiss our failings as bad luck, we're pretty shit at doing the reverse!

Maybe we all need an attitude shift. Here in the U.S. it is not unusual at all for people in their forties to be buying their first house. It isn't expected that you will be able to own earlier on so people don't stress as much about it.

Not sure why renting is 'soul destroying'. Well, renting the grotty top half of a house which was damp, about 5ft from a motorway and had a downstairs neighbour who cooked a lot of curry wasn't a whole heap of fun, but there have been nice places we have rented that weren't soul destroying at all.

Yes YellowWellies, my point exactly.

Another example that keeps coming to mind is an ex-colleague in her early 40s who frequently makes casual remarks about paying off their mortgage on a 5-bed family home, renovated exactly as they want it, with every networked gadget under the sun. This is the same person who, while I was feeling low having undergone 2 failed rounds of IVF, confided 'we're fed up at the moment too. DH has been told he can't keep his company car and he's only been given an allowance of 9k to replace it.'

I do realise that it is very unfair of me to let this sort of example fuel my resentment of those who've profited in general. It just feels to me like some people just don't get the extent of the problem.

I'm not sure I agree with that. It sounds like just the sort of attitude the bankers would love us to have. Mortgages in the 50s typically lasted just 8 years. We've already moved onto 30 year mortgages, in Japan they are talking about intergenerational mortgages! (incidentally house prices have been falling there for 25 years and lets face it, they're not short on population are they? so that rather bursts the supply and demand argument). Why on earth should the young have to put up with a shitter deal than their parents if they are working just as hard if not harder? A house is a basic human need, without the credit bubble we wouldn't need to be talking about such extreme measures to acquire one. The last thing we need is to adjust our attitudes to swallow more of the banking industry's crap.

Last point meant to hopandskip btw!

To be honest Tarty extrapolating from individual encounters to form a view of a group in common is something that humans do. Indeed it's very difficult to avoid doing this - we all try to turn anecdotes into data. Those having a huff about it can clearly see your point but seem not to want to compute / deal with seeing the situation from the other perspective. After all wouldn't it be nicer to feel that your getting richer every month wasn't hurting anyone?

Another thing different about the US is the fact that long term fixed mortgage rates tend to be the norm. The people who lost their homes when it all went tits up (literally had to leave because banks foreclosed) tended to be people who bought adjustable rate mortgages (they gambled on rates remaining reasonable or that they would have the income to meet the bill three or five years down the road).

Surely it all has to stop at some point though? when we bought our first house (I am only 38) we paid a three thousand pound deposit. For that same house now I would need to find thirty thousand pounds. It simply wouldn't have been possible?
I still don't get why people are buying crappy houses and paying over the odds for them though. Houses sell quickly around us but there are still a few that sit there stagnant simply because they are sticking to a valuation they got five years ago. It astouned me some of the crap we were shown when we bought last year - the owners honestly though they were worth the money?

On my first house I made £70k profit. Very surprisingly I made the same on the second when we sold last year BUT that is only because we bought it cheap. Pay too much to begin with and there is no chance - which bring me right back to the beginning of my argument. Surely it has to stop or no-one can buy again?

And also yellowwellies, the whole bank of mum and dad is dwindling. People in their fifties are not going to hand their 20/30 something offspring a ££30k deposit of they're worried about fuel inflation, annuity rates and care home fees.

And the government at some point have to realise that they can't expect people to provide for their own education, pension provision and old age care AND support big rents and house prices.

The maths just don't add up. The easiest solution is for prices to fall then everybody will be better off.

Like you say, sooner or later, that generation are going to have more voting power than the pensioners.

30 year mortgages at a fixed rate was pretty much the only game in town when I bought my house in the US in 1995. You could shop around and refinance over time, pay points.

The Japanese have massive population pyramid problems, too many older people being supported by too few of working age and a birth rate that is not sustaining population replacement. The supply and demand thing will have its effect there as the current smaller youth population ages.

A house is not a basic human need. A roof over your head maybe, but a flat will do.

Whoknewthat -- in the US, people are expected to provide for their own third level education, pensions, health insurance and old age care and still house prices rise and rise and somehow people manage it.

Yellow Wellies,
Those figures about pay are exactly the same as those on thepropertycon - is it your website?

What people in their 50's and 60's don't seem to understand is that women now have no choice but to go to work in order to compete to buy a shelter. In the past women could choose to stay at home and look after the children. It's rumoured that the Rockefellers funded the women's lib movement. Go figure - all those extra hours worked are just to pay bankers a bonus.

And google the stories of the 99% to see why following the US economic model is the last thing this country needs if it is to be a happy, healthy, functioning society (note I say society NOT economy). What is best about the UK are our differences to the US. We are unequal enough as a society.

When I said house I did infact mean 'home' - I wasn't meaning to differentiate between different dwelling types so apologies for the confusion arising from my poor choice of vocab.

No it's not my website but I do know of it and the data can be extrapolated pretty easily from Land Registry house price figures and the ONS figures for average wage.

That's all very well maths but who is going to live in all the big houses we have.

There are thousands of flats standing empty because families need houses. The influx of migrant workers has decreased because there are no jobs. Many have left the country.

People will only accept living in flats if there is no alternative. And there is, because people are selling houses no one is buying.

See, I've worked very hard to get where I am. Bad start and nowt given to me etc.

But that doesn't stop me recognising that the next generation are having a very tough time. The reality is my degree was free and house prices were doable. I think it's really really tough that these two things are no longer true. I wish it were otherwise.

As for the person who said that the economy and workforce are changing beyond recognition, I couldn't agree more. Soon there will be well paid jobs and poorly paid jobs. Barely anyhting in the middle. I have thought that for a long time and this is why I am doing everything in my power to ensure my DC end up in the former.

I totally agree Cassandra my sister is forever getting shit from her MIL for having a career and not having kids until her 30s - when actually she had uni debts to pay before she could think about having kids - her MIL clearly unable to understand what starting out adult life with a millstone of debt is like but can't correlate that that might be why she has to wait to be a GP. Her MIL reckons that as a former womens' libber my sister should be grateful that 'she' gave her the chance for a career. My sister reposts that she also stole the right for her to be a SAHM. And the ability to buy a home on one wage.

If people need to sell and no-one is buying then prices will fall. It's up to estate agents to work harder to persuade clients that a house is worth what someone wants to pay for it. The attitude that makes sellers blind to basic maths and basic market principles, and makes buyers less picky than they should be because they want a house and won't accept less is what keeps prices up and keeps people out of property ownership.

I absolutely agree with you Wordfactory about the end to jobs in the middle. One way to make it different would be to make higher education more affordable and it is really, really short sighted to price it out of the reach of a lot of people. While slowing turning blue in the face holding my breath waiting for someone to see sense on that score, pushing the DCs to make the most of what they are offered from the education system is the tack I am taking too.

Sales volumes have collapsed so Estate Agents are desperate - those that tout the highest valuation price get the business. I agree they very rarely get the sale. It's not hard to find out sold prices just go onto Zoopla or the Land Registry (you'll find sold prices are very different from asking prices in many areas) and sellers should take some responsibility for pricing realistically rather than kite flying. If your house has been on the market longer than 6 months with no serious offers and proceedable buyers - it is too expensive and you are simply 'looking for the greater fool'.

When you've been priced out for a decade, I reckon that would very much make you less picky and likely to grab the first thing you can afford - I agree not a good attitude but understandable, especially if your older relatives have been nagging you to get on the ladder 'because you can't go wrong with bricks and mortar' (groan). Compound that with the media frenzy and I can see why those without thick skins caved in.

Buyers too should check out the last sold price and ask just what has been improved / added to the house to justify the inflation. I always do that. It does make some folks squirm when the answer is put some new carpet in one bedroom but added £110k onto the asking price.

I think the missing piece of the jigsaw as to why prices aren't falling faster is that there are very few forced sellers. The housing market is set at the margins and with our ridiculous interest rates (aimed at propping up the market) only those that absolutely overstretched themselves are feeling pain. As more and more IO mortgages fall onto the SVR at remortgaging time (this year is going to be nasty for that) then we will see more falls. Or we will see the government wasting yet more tax payers money to try to prop up the market and delay the inevitable (anything to avoid the wrath of the paper millionaires expectantly looking toward a retirement of luxury but unwilling to pay for their own healthcare).

At the risk of adding more fuel to this pyre www.moneysavingexpert.com/news/mortgages/2012/04/building-society-breaks-mortgage-tracker-guarantee-to-quadruple-rates

I was wondering when that would be posted.

Wont go down well.

Sorry to be predictable but see, high LTV mortgages, bad idea!

i think the house price correction is taking place now and has been for the last few years. i am looking to trade up ATM & certainly not looking to 'make' money on the new house, just for a house we want to live in.

loads of people who think they own a house are kidding themselves - they just have a share on the current equity & an obligation to pay interest of the rest.

DP & i became mortgage free several years ago, having started to overpay in our mid twenties, since then we have been saving. as soon as were get the new house we will start the process again.