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.

Difficult to say, Slinky.

It depends whether your DH's salary is now half of £200k or half of £40k, doesn't it?

It sounds like you have some equity, at least, so I wouldn't say you're screwed if you're managing the mortgage payments.

I can't see that seething resentment is healthy for you. Of course there are loads of people who've done really well out of the boom. There are also nearly 3 million out of work and facing uncertain futures. Best to focus on what you have; an OK place to live and a loving husband and family. My own choices weren't that dissimilar to yours and whilst I could have made better ones they weren't right for me at the time. I'm in total agreement with you that various governments have made mistakes in not controlling the market better.

We're currently in a 2 bed flat, and the only way we can save money is for my MIL to live with us for 6 months of the year as childcare. We are so lucky but it's quite hard with 3 adults and a baby in a flat. My wife grew up in a country which now has an unofficial unemployment rate of 25%. She had to leave everything she knew to find work, despite having a masters degree. Even with that she can only earn just above minimum wage. Her stories of having to beg other kids at school for lunch keep me grounded

"So my question is are we screwed, ok or about even?
I genuinely don't know! How would you feel if you were us?"

You own two properties, with at least £80k of equity in one (no idea what you have in the flat)? I'd say you were doing pretty well personally.

You only have to go onto House price crash to see what resentment does to a person. Some of them have been foaming at the mouth for 8 years now, every newspaper headline gives them hop that you and I will be homeless on the streets with our children (breeders we're called) because we over stretched, lied to get loans apparently and now we are stealing their free money interest too.
It's not pretty.

We bought in 1989 just few months before the house price crash. Our mortgage wasn't quite 100%, but the deposit was borrowed from the PILs. We then spent a lot of money gradually doing it up.

We were in negative equity for years. Actually, when we finally sold in 1997, we did so for less than what we paid for it.

We rolled that mortgage into our new house, but were able to afford more because DH was earning more, but we still went for as much as they would give us, and had to pay the solicitor with a credit card. We paid 50k less for this house than it was on the market for 2 years earlier.

Now, 15 years later, we are pretty comfortable. The house did explode, valuewise, for a few years, but we stayed put.

What I am trying to say is don't be too despondent. Negative equity only really affects you if you need to move quickly. If you stay put, prices will rise again and you will be able to move on. Your next house will also have suffered from negative equity, so you won't need to pay as much for it.

Thanks inabeautifulplace, I think I concentrate on the negative, we can't move, DH salary a third of what it used to be, money is super tight etc, so that's actually cheered me up no end!

Your're right, resentment is not healthy, so I've been glad of the opportunity to vent on here rather than in RL

Until recently I've been refusing to let it worry me. It's the sudden 0.5% increase in our mortgage rate, despite no movement on BoE base, along with the equally sudden drop in our income, and raging pregnancy hormones that have upset me lately. It really isn't doing me good and there is no solution except to keep trying to increase our income elsewhere, which I'm doing to capacity.

By the way, can't remember who thought we'd had CTCs coming in while overpaying the original mortgage - we didn't, we had no DCs then. I was working FT.

You're. Stupid phone.

We are currently in limbo regarding our house. We bought it in 1996 just before prices rebounded from the 90's crash. It was perfectly adequate for the two us, but 16 years, 2 DC's and lots of "stuff" later, means we are now bursting at the seams!

But we are now nearly mortgage free on this house.

We really want to upsize but even now, house prices in our area for the sort of place we want are so high that we are terrified of making the move, getting a big mortgage again and getting into a pickle, if / when interest rates rise sharply.

I know negative equity is responsible for a lot of the sluggishness in the market, but I think the fear & indecision for people in our position is equally damaging

As above, unless you need to move it's not a huge issue. You could work out what you would have paid off a mortgage in the 15 years you've owned property and just stayed put. I reckon you'd be worse off in that scenario though. I've paid £625pcm for 4 years and paid a grand total of £4k off the mortgage! Have been a bit lucky though so I think we have about twice as much equity as I started with.

Everybody's story about property and making/losing money is different because everybody's circumstances, advice, location and starting points are different. There's no pattern. Some people made a lot as baby boomers, some people made bad decisions at that time, some moved too often to profit, etc etc.
Same with the 90s-to-mid-2000s. There was profit to be made but we all had different things going on. If you followed a certain script you could make big, we didn't all have access to that script or the wherewithal to turn the pages. Let it go.

Thing is, in 2006 there was a lot of advice around not to buy,that it was the top of the market and that you should only buy if you had a good 'cusion' of equity. Yes, the banks shouldn't have lent you the money in the first place, but complaining at the baby boomers is about as much sense as complaining at the people like me that refused to buy in 2006 (dispite having a good deposit and good jobs) and rented until 2008, at which point we bought our house, the vendors made a £45k loss on that sale (they'd bought it at the start of 2007 and were getting divorced so had to sell. DH still thinks we could have knocked them down further but I had my heart set on this one.) You are railing against a system the didn't stop you doing what you wanted because it wasn't in your long term interest - if you had been trying to get that mortgage now you'd probably be joining those complaining that they are stuck in rented as the mean banks won't lend them money that they can't afford .

Long term, your parents are right, house prices have fallen in the past, it's reasonable to think in 25 years time your house will be worth more than it is now, at which point you will own it out right and will be free of housing costs when you're winding down to retirement. My parents, baby boomers paid 15% mortgages, they had negative equity in the early 90s, but they took on extra work to cover the bills, stayed in the same house and then sold in 2006 (to someone who also didn't take the advice that it was the top of the market) for a fat profit after being in the same house since I was at primary school. Their profit might be 'unearned wealth' but to keep the house both my parents worked full time then did extra work in the evenings (one from home, one out the home) they went without holidays, drove crappy cars, had to ask their parents for help with things like school shoes, they could have given in when they had negaitve equity and stupid mortgage rates, they could have walked away, gone into rented and actually have a better lifestyle. I personally think they earned that wealth.

I understand and sympathise Tarty. I am one of the lucky ones who invested earlier, but I was not shrewder or cleverer than you, it was pure luck with the timing. I hope one day soon the tide turns in your favour. Same for all the others in horrendous financial situations at the moment through no fault of their own.

Sounds good inabeautifulplace i've read some other posts and know I should just be counting our blessings that we can pay the mortgage!

I think I will get flamed for this but...

I'm 28 and bought my home in the SW 3.5 years ago, it has approx £35k of equity at the mo. I bought it at a LTV rate of 75% after saving from 18 years old for a deposit. I worked all through uni in order to do this. My parents/relatives didn't help with the deposit.

I think lots of people believe buying a house automatically gives them some sort of right (not sure if that is the right word) to have 15% more money in 5 years time.

I really wanted to buy a lovely 3 bed Victorian in a really nice area for more money which would have meant I was borrowing at more like 90% LTV rate, I didn't do this because I realised long term 90% LTV rate isn't viable. Instead I opted for a much uglier 1930s house in a fairly mixed area which need a total refurb, I didn't love it as much but I knew I could afford it.

I think part of the problem was that the government let this happen, why banks were ever able to offer 100% LTV is madness to me. But also I think a lot of people at the time were greedy, many of them then got bit on the arse.

OP I do feel bad that you are in negative equity, it must be very frustrating for you. But if you had profited from the madness of the market at the time would you feel responsible now?

People at the time were sucked in by Kirstie and Phil. If LLL hadn't been commissioned, I think fewer people would be in trouble now.

I only own my house outright because over the 10 years that I've been on my own I have bought up tiny wrecks, lived in them with the DDs, done them up and moved to the next one.

I've been up decorating at 2am most nights for nearly a decade. I've worked damn hard and imo I deserve what I have now achieved. There is no other way for me to have done this legally.

It's not always just luck, some of us have struggled, lived in very shitty conditions, and worked very hard.

Probably not shouldIbecross.

This thread has been good for me. I can see now that we need to just keep trying as best we can. It's a shame our DCs won't have a lovely rural upbringing like I did, but we're not stuck in a bad area, and I can see that many will have even fewer choices.

All I want is for the lucky ones to appreciate their good fortune and to understand why those of us stuck in the negative equity trap can't make the choices they do.

It seems to me there's no point in blaming people who just happened to be luckier than you. Why not look at the causes of the housing bubble?

1. Decision of govt in 1980s to allow council tenants to buy their council houses, while forbidding councils to spend the money to build new homes, thus creating housing shortage.

1. Decision of govt in 1980s to end rent controls, thus allowing private landlords to make a fortune, charging extortionate rents to people who couldn't afford to buy their own homes.

1. Decision of banks in late 1990s/early 2000s to lend absurd sums of money (up to 5 times salary) to people who wouldn't be able to pay it back if they suddenly lost their job/interest rates went up. This helped to inflate house prices massively.

Hence the thread title, hackmum. I don't blame homeowners, but I can't help feeling jealous.

'All I want is for the lucky ones to appreciate their good fortune and to understand why those of us stuck in the negative equity trap can't make the choices they do'

Eh? Sorry but that really gets up my nose. You have a home. You can't upgrade it to something amazing but neither can most people. Since when did that make you a victim? I refuse to apologise for being in a better position than you are.

1. Decision of Government in mid 00's to keep base rate artificially low, thus encouraging excessive borrowing.

Northernlurker, I think that's a little unfair to the OP. I don't think she wants an apology, that would be ridiculous. I think it's empathy she's after and for some people to understand that home ownership is much harder for people now than it was 15 years ago. Of course, that cycle is likely to come around again. In some ways I'm glad I have a cheap flat because I can furnish it with tat and it doesn't look out of place

We have been lucky but we have taken risks, scrimped and saved. We bought out first house for £45 K about 17 years ago. We drove an old banger and had a lodger. We made several moves up the ladder, taking the lodger with us until I was pregnant with our first! We then downsized by 25% value as I was becoming a SAHM.

Seventeen years on we live in our " forever" house worth over 3/4 milllion.
How have we got here? Luck, prudent investments. hard work, savings and taking risks. DH earning well is probably as big a factor, TBF.
We had lodgers for a decade aswell. How many people are willing to make that sort of sacrifice, though?

Nothing is handed to most of us on a plate.

I too had a lodger, yes I bought first house for 40k but my mortgage was high compared to salary, yes I was lucky but I scrimped, saved went through negative equity and never released equity just kept re investing. I do feel sorry when people say you should not of bought at the peak, as I believed it had peaked in 2001, then 2002 and it kept going when property was increasing faster than first time buyers could save, hindsight is great.