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.

My 'survival kit', whih I've always had, recession or not, is:

growing own food as far as possible
cupboards/freezer very well stocked with non-perishables - lots of tinned stuff, dried beans/lentils, loads of pasta, rice, homemade preserves. Applies to toiletries too.
Keeping chickens
Open fire
No debts except mortgage which is being paid off asap.

My potatoes have sprouted!! What do I do now? Do I have to rebury the green leaves?

Does anyone know what land area you need to support a family of 3?

Also I still don't get how having debt when the collapse comes is an issue? Surely if society collapses, debt just disappears? Wont people who own their houses feel like idiots when the banks collapse?

entropygirl I doubt the collapse will be as spectacular as that if it reallys happens at all. More likely a long slow contraction of the economy. Those who can't pay their mortgages will lose their houses, sold at rock-bottom prices to those who can who will then charge them rent.

Re the potatoes - yes, earth them up again. You don't want the sunlight getting to them at all.

No idea how much land you'd need, I'm afraid. It depends on whether you're hoping to live wholly off the land (difficult) or partially.

I doubt the collapse will be as spectacular as that if it reallys happens at all. More likely a long slow contraction of the economy. Those who can't pay their mortgages will lose their houses, sold at rock-bottom prices to those who can who will then charge them rent

I think that's about right.

Also, HMG is trying to inflate their way out of a house price "re-adjustment" so that a 2012 mortgage debt will be like chicken feed in 2020.

How much better off would you be if you didnt pay income tax ?

I wonder what income tax REALLY gets spent on.

Lots of people in america have stopped paying theirs after watching that film.

Nothing has happened to them.

There have always been survivalists, especially in the seventies. My parents are more than a bit like that too.

It's intereesting - American survivalist head for tteh hills with their arsenal and rabbit hutches, British ones talk of forming sustainable communities.

I suspect the British model would work better. As multiple Dystopian Future films show, there are always bad guys on motorcycles who knock over the single cabin dwellers.

The british need to wake up to what has been done to them and realise that their government do not work for them, until they do this there will no sustainable communities.

Wow! Cannot believe I made it through the whole thread!
Fascinating stuff.
Great to hear so many ideas. Nothing intelligent to add but reckon this should go in MN classics!

We rent have done for 10 years - It's a choice at the end of the day, we live in a stunning house, that we couldn't afford to buy.

The attitude about "Oh well if you can't afford to buy just rent" like it's a second best option is just bonkers, there are some lovely places to rent, we save up, we have pensions we just don't want to own a house right now DH is 41 and isn't bothered neither am I - one day we may buy but only when we want to and its somewhere we love, not just for the sake of buying.

We just pay our money to the landlord people on interest only pay theirs to the bank, big difference is we don;t have to pay any maintance.

We feel relaxed and secure and spend any extra income on fun stuff not kitchens and decoration and roofs and driveways like many of our friends.

Best bit is if we fancy we can move, no problems!!

I bought in 1997 so I do realise that I was lucky to get on the housing market when prices were low.

However I haven't benefited from price increases. My first house cost 32k and I sold it a few years later for 72k. So yes, on paper a 40k profit.

But the next step up the property ladder cost me 130k, a few years earlier it would have been 60k. So instead of having to find 30k to make up the difference between a 2 bed terrace and a 3 bed semi I had to find 60k. So I have a bigger mortgage than what I would do if prices hadn't rocketed.

I could never afford a detached/4 bed house. DH needs an office at home so it meant we could only have one child.

On paper I might have a house that's worth more - but what use is that to me? I'm not planning on selling it, I want to live in my home for the rest of my life. So the value of the house is just a number.

This is why house prices rocketed

Something is going to happen that will see them plummet hat4uk.wordpress.com/2012/05/11/jp-morgan-demonstrates-why-the-futures-in-the-slog-12/

Anybody woken up to what has been done to them yet ?

redshield I think I have always believed that money is a crap system (I think I have substantial communist/anarchist leanings) and this was confirmed by reading Ursula le Guin's 'the dispossessed'. But I don't feel like anything has 'been done' to me. I was born into this system...which is evolving, essentially in the only way possible given the starting conditions.

I wouldn't say this thread has woken me up, but there are some aspects of the mess that were new concepts to me - for instance that the benefits system is propping up the rental and hence housing market as a whole.

I haven't read the whole (or even most) of the thread.

But it seems to me that one of the underlying problems is the lack of tax on profits derived from sale of your home.

This is the only form of income that does not get taxed. And yet it is an income that people do not work for and it is often pure luck that some people make this profit and others don't. It's bizarre that this profit gets treated so much more favourably tax-wise.

The fact that there is no tax has encouraged people to see their house as an investment rather than a home, and has contributed to the massive rise in prices.

I would like to see CGT introduced on all house sales (including the main home). In return perhaps VAT or income tax could be cut. Of course it would have to be introduced very gradually as many people have planned on their home being their pension.

Entropy girl.

The system is collapsing not evolving.

The taxpayer is forced to bail out banks that created too much debt but you do not feel like anything has been done to you ?

www.mind-trek.com/treatise/ls-cona.htm

This is not a bust that is coming, it is THE BUST, the end of the road for the pound euro and dollar at the very least.

This is what happens when banks are allowed to create money (debt) from nothing.

Greece is very close to leaving the eurozone so the plan of the madmen is not going to plan at all, if only greece had handed over their sovereignty in february like a good little country then the madmen would be happy bankers.

redshield evolving can include collapsing... many critters have evolved themselves into too much of a niche and then died out....

I'm looking forward to economics mark II.....

Well i suppose there is good evolving and bad evolving.

I wonder which one we are going to get, if fractional reserve banking is still allowed to continue after the reset it is safe to say things just got a whole lot worse for society.

This thread has really made me think...it's absolutely disgusting what's happening with property in this country..I highly recommend reading a book called 'the jilted generation' if you can find it..it will really open your eyes..haven't been able to put my kindle down since I downloaded it!!

The property prices increased because the banks created money from nothing and gave out way to much of it via mortgages.

The creation of money from nothing is how Buy To Let landlords were able to "buy" houses without actually paying out any of their own money. 100% mortgage and the tenant pays off the house.

It was very easy to fill these private rentals as there is not enough council houses for people to live in so if you cant get an employed tenant in paying the rent you can always rely on the government to foot the bill.

Now we are at the stage in lots of areas were all the council houses are taken, all the private rentals are full and people are now living in sheds in back gardens.

I wonder why the government have not embarked on a mass building project of cheap affordable housing for people to live in. I know we have the newbuy scheme that first time buyers can use to get themselves into instant negative equity but its not really enough is it seeing as the only real reason houses are so expensive is because banks create money from nothing.

Having a shelter is a basic human right so go to your local MP and ask them where do you put this shelter, Saying that save yourself the trouble and go and beg at the queens feet for some land.

How people can still think they live in a free society is beyond me.

Until the majority of the people wake up to what is being done to them then things will keep getting worse, a whole lot worse.

www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-scariest-presentation-ever

The government will not stand before the people and tell them what is about to happen, it will just happen.

Just thinking about the jilted generation mentioned above. I spose my DCs (late twenties) are part of that, but must say they all have degrees and, fortunately, jobs. I didn't get a degree and nor did my DH. Most of my pals became primary teachers so did a diploma (I think) , we weren't the children of doctors or solicitors and no-one said, hey, you're quite bright, why don't you get a degree and become a ..................( interesting job). We oldies weren't THAT privileged. And its the changes in minimum wage and human rights which have caused the demise of apprenticeships. I doubt that the jilted generation would work happily for 7 years (I think it was ) to become a plumber, with v small wage (we would have stayed on living at home until qualified, that was the norm).
Times and circumstances have changed. And house prices have soared and slumped twice in my lifetime so prob will again.

The property prices increased because the banks created money from nothing and gave out way to much of it via mortgages.

But wasn't it a vicious circle, everyone thought house prices could keep rising. The Chinese would keep getting richer and buying stuff and needing iron ore, oil, so companies would get richer, employees would keep earning, the wealth would filter down. It was a win win situation. If anyone had foreseen the crash (or the few who predicted it had been believed) Ireland and Spain wouldn't be in the mess they are in. But no one saw it coming, Gordon Brown least of all!

I didnt think house prices would keep on rising, i knew at some point they would plummet, that point is close and the collapse of the eurozone will probably cause it (even though prices are falling already)

Plenty of people saw all this coming, crash of house prices, crash of markets and collapse of the euro, not many people listened though.

The house price bubble was just the next thing used to keep the credit bubble going, there is now nothing left for the uk except collapse of the economy at some point.

We will be left to fend for ourselves till the new monetary system is introduced, if the same people who invented this system invent the next one its safe to say our freedom will be taken from us again.

www.zerohedge.com/news/guest-post-uk-about-engage-stealth-default

Not really a good sign is it.

Sorry to bump an ageing thread, but I've just read a very good, objective and non-rabid piece in the Wall Street Journal on this subject. This is something that our British press and news channels (including BBC) just don't seem to be able to say out loud:

blogs.wsj.com/source/2012/06/15/the-bank-of-englands-zombie-economy/

Basically the whole elephant in the room with our current economic crisis stems from the fact that a huge amount of our bank's assets are based upon property prices that everyone now accepts are over-valued. A crash will wipe them out, and as such we now have a zombie-economy.

The article puts it better than this. Worth a read.

The british press and news channels are not going to admit what is coming for house prices until it actually happens (already started in the north), the days of headlines consisting of buy a house now or forever be priced out are long gone. The housing bubble was created to keep the pyramid scheme we live in going for a bit longer.

The government are now clutching at straws by asking the british public to invest in infrastructure bonds and by giving the banks more money to give out to small businesses, they know full well that this will not fix the economy because they know that the economy cannot be fixed. You are watching the government pretend to fix the economy as they cannot come out and admit that its finished because this would cause mass panic and they would take the blame for it.

If people were to do a bit of research on argentinas economic collapse that happened ten years ago they would soon realize that britain is heading for the same fate along with a lot of other countries.

This is what happens when the population are forced to participate in a fiat currency that is backed by nothing. Every single fiat currency that has existed has collapsed, every single one of them without exception, i cant see why britains will be any different once things really start to get desperate.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
Henry Ford

If everybody in britain sat down tonight and researched how britains banking and monetary system really worked i believe we would see a revolution as well, sadly they wont and what is happening in our banks and economy now will be paid for by their children for the rest of their lives.

Unless people inform themselves to what is REALLY going on in our banks and how our monetary system really works then its debt slavery for the next few generations at least.