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.

I have noticed an interesting step change in my area. There are houses for sale for between 100 and 250K. Then there are houses for 800K plus. Nothing in between. Which would suggest that there is not a lot of fluidity in people trading up as you put it Wasabi, because there is such a leap. It may just be my local area.

Ouch I imagine there'll be a few sphincters tightening in the Manchester area... never ever doubt that banks won't use the small print!

chocolate I have noticed the same in the areas I'm looking at - stuff that is cheap enough for folks to get a mortgage on under the new more sensible lending criteria is moving, equally stuff at the bottom that has been repossessed is moving. Houses that are being sold from one paper rich mwillionaire to another are moving (largely because the vendor and the buyers haven't noticed the rest of the country is stuffed, and they haven't realised the game is up) - anything in between (which for the last five - ten years relied on IO, or some dodgy self cert mortgage where folks could fudge their earnings (liar loans) or other form of application from those being a bit imprudent stupid) is stickier than a sticky brown stick. I'm guessing this is prime negative equity territory too so people are slow to drop prices.

I think we are going to go back to something of a north/south divide. My and dps family are all northerners and have been telling relatives who own multiple properties to sell, the party is over.

If i would guess the last areas to increase in value are most vulnerable to negative equity. I think the south will trundle on largely flat.

Bit late wrt thread, but I've just tracked down Evan Davies' 2008 blog post, "Are we stupid?"

"how can we have let ourselves get into this again? Didn?t we know this might happen?... Yet some of the world?s best paid people lent money secured against inflated house prices, and appear to be surprised that the market is not what it was."

The wonder's not so much that some housebuyers - who aren't professional economists and were just trying to live their lives - got sucked into the frenzy, but that there are any of us who didn't.

All very Emperor's New Clothes.

I am minded to think of the last crash - that started in the north but the south, even London was not immune in the end. If interest rates do rise, or if more banks do use their small print to shift folk away from IO to repayment mortgages, because of the sheer size of London mortgages it could turn really nasty.

As to Evan Davies I'm rather cynical at his blog post it's all very good putting the contrary opinion on a relatively obscure blog - why wasn't this on the mainstream 6 o'clock news? The BBC were horrific at ramping - all of the property porn was disgusting. I am guessing there are a few BTL portfolios amongst BBC staff, you only have to look at the register of members interests in the Commons to see that our MPs are up to their snouts in property empires. No wonder they have allowed a whole generation to be priced out.

There are so many vested interests that have profited from shafted the young it is criminal. The intergenerational pact is well and truly broken - we've seen race riots, I am guessing we may see age riots in the future. Indeed you could argue that intergenerational disparity could have been one of the many, many reasons for last summers hi jinx

The good times will come again. They always do. To think anything else is hysterical. Compare standards of living with 50 yrs ago....

The good times will come again but probably not in our lifetime.

The house price crashes you have seen in the past will look like the blips that they are once this one kicks off.

There are certainly no signs of crash here in London - our house price has been the same since the peak but bigger places have gone up enormously

It might sound hysterical but wages aren't rising and with international competition I find it hard to see how they can in the near future. Without wage inflation and without the invention of ever riskier mortgages - I see no logical return to the 'good times' (for those that were invited to the party) for a long time. Imagining the last 20 years will be a guide to the next is what sounds illogical to me...

Mmm I also don't think it's sustainable.

People need to sell for the following reasons - death, divorce, debt....

These are the people who won't necessarily look to make a whomping profit.

But there aren't that many of those.

Although it could be argued that some people are going to struggle to manage their debts, relationships break down because of debt leading to divorce....

'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'

If you don't earn a graduate salary of what, £21k, you don't pay the loan back. And you don't pay a penny back until you leave university. If you stop work to have children and never go back again, or only doing part-time work, you stop repayments on the loan.

Many universities in the top league are also offering bursaries to students from the poorest backgrounds as well. Including Oxford and Cambridge.

Absolutely why charge the folks who earned an extra £100k over their working lives by virtue of going to university (back in the days when a degree meant anything) for their schooling when you can pass the cost onto the next generation for whom a degree will secure them feck all financially.

Abrad, that's ludicrous.

So if you earn £1800 a month gross, you pay back 10% towards your loan. Oh that's OK then. Plus another 10% for your pension. Plus say 15% on average tax and national insurance. Leaving about £1,100 free a month to pay rent, fuel, travel and food.

Yes, these, the educated middle classes, are the people expected to save £30k for a deposit for a 1 bed flat.

But if you're only going to university to meet a rich husband to support you then your quids in.

Yes, look how far we've come

I went to Uni - accrued debts and then met a poor husband with debts and MW job.

I really screwed up!

The people in the middle, who don't qualify for the full bursaries and who can't pay their own way without enormous sacrifice, are really squeezed.

My oldest two DCs are in US universities. DD1's annual tuition + room and board if she were starting where she is this year would be approx $57,000 for the year (x 4 and the total cost would be in the $200K range for third level ed). As it turned out, she qualified for student financial aid (effectively a university write off) of about 95% of her annual bill, leaving the 5% shortfall to be made up by a combination of loans that she and exH and I took out. She herself will owe approx $20K upon graduation next month. She has already secured a good job on a solid career track and repayment will not be a hardship to her. DS is in a state university and tuition + room and board are lower (about 2/3 of DD1's annual bill) but he will end up with about the same debt load upon graduation. However, since he intends to go to med school afterwards, he will spend a good few years in debt. Again, when he finally comes out the other end, repayment will be doable. Going to a good university and doing a degree in something other than English Lit something heavy on the maths or science is a really good investment. It's worthwhile to really push children. (Apologies to English Lit people out there but I am a history grad and I wouldn't advocate doing that either)

People with so-so degrees in softer subjects from mediocre universities who have paid a lot or taken out large loans to afford it -- I think they have made poor decisions.

I the chance to study at Oxford and adored my time there - it really was an old school uni education about expanding your mind and learning debate and rhetoric and setting the world to rights with amazing tutors (which was mind blowing to a comprehensive school girl from deepest darkest Hull). Despite this.... I won't be advising my children to go to uni unless they are going to university to become something i.e. a doctor, dentist etc. Sadly it's just become a cheeky way for government to keep young folk off the unemployment figures and to pay their own dole for three years.

Is the womans lib really to blame for any of this, as some have suggested?Genuine question....

Well we've gone from needing one salary to buy a house to needing two? So I think the evidence sort of speaks for itself. And to get two people out to work, paying taxes, in debt (and therefore very obedient), and two people consuming - well that's pretty good for big business and government isn't it? Which is fine for those women who want to work but not for those who want to be SAHM. Sadly because the housing market now prices for two incomes that is the lifestyle that is dictated for many people. We're just tight arses so we make do with one full time and me on freelance - but I am clothed in supermarket finery

This incredibly intelligent lady speaks volumes of sense and her analysis of the death of the middle class is as valid for the UK as it is for the US. I really really recommend watching this if you have a few minutes. It also explains the womens' lib issue / rise of the dual income household far better than I can. Anyone who wants to see what the economic problems we are facing look like, en masse and with fantastic analysis - do watch this video. She's a Harvard law scholar - so not a tin foil hatted conspiracy theorist! Seriously this is definitely worth putting the kettle on for and watching.

I will watch the video as I suspected the same myself, but never looked into as fact

The Money Masters video explains everything.

Crikey tartymcfarty - try talking to someone from Ireland or Iceland about banks, property bubbles and injustices of economics.

You are lucky to own your own home.