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.

What does .75 pension mean?

Just before the bubble, I used to work with people who were in negative equity. They'd bought in the early 90s I think, this was pre-'97 and they were stuck*. I was carefree and renting in a very boho sort of set-up, their mortgages were about twice my (shared) rent and they had literally nothing left at the end of the month. No holidays, no new cars, nothing. I was told that nobody (average) ever had any money for the first two or three years after buying a house, so prepare for that, and so it turned out.

*Of course they coined it in about 5 years later.

OP - would you accept that some of those with 'good fortune' actually had it shitter than you over the course of their mortgage? You aren't paying anything like 15%, if you get into a mess and can't pay your mortgage, it now takes months before the mortgage lender can get you out of the house, and have to prove they made efforts to help you - not so the people who got in a mess in the early 90s. You are still paying historically low interest rates, you are still able to have the option of working part time, you are relatively secure in your home and eventually you will pay it off and own the house outright. Due to the changes in the way mortgages are offered, you are able to use the equity in your mum's house without her having to remortgage herself to release it.

Last time the bubble burst, it lasted a long time, people in 95/ 96 were still 'benefiting' from buying at the bottom of the market, when it wasn't obvious that property was a good investment. It was also hard to get a mortgage, so those who did had good deposits, good jobs, and could only take mortgages at income multiples that meant the repayments were a smaller percentage of their income. There's an awful lot of people who would have liked to buy then but were unable. You probably wouldn't have been able to buy then even if you were 10 years older, you'd have been forced to save up a deposit, which would have given you a bigger cusion, but that means you would have had to put your life plans for a family on hold.

The changes to the system might have allowed the bubble to grow, but it also allowed you to buy a house, under the old way mortgages were offered, you'd have had no chance.

OP I think if you had been slightly older ( I'm 40 ) what might have helped you would have been the memory of the late 80's/ early 90's, where lots of people saw that house prices could shoot up and then crash. With the added nightmare of interest rates rocketing too.
I have vivid memories of my mum in tears wondering how the fuck to pay the mortgage, working F/T as a teacher and doing lots of tutoring etc to stave off reposession by the bank.
I got a mortgage in 97 when DP and me realised that the amount we both paid to rent our rooms in shared flats could be put towards our own place. Had to jump through lots of hoops as DP had his own business ( no easy lying self certificate stuff then ) and a 20% deposit.
I was very wary buying current house in 2006 as I felt that it was time for the market to go tits up. I think 125% mortgages and RBS making billions profit, made me go WTF? So refused to get one greater than 2.5x our income and put down a massive deposit. House has only slightly decreased in value.
However without the memories of my mum struggling it would have been easy to get sucked into getting a bigger property/loan with much more risk.
Oh and lucked out by getting a Tracker mortgage against my better judgement so monthly repayments are now less than 2006.

I think you are justified in feeling resentment towards the banks and the government. As to the mortgagees/homeowners that purchased at the 'right time' you cannot blame others for trying to get ahead the best they can.

As the majority of MP's were property flipping using taxpayers money to speculate on 'second homes', it was in the vested interests of the latter to inflate the housing market. The lax lending laws, self cert (liar) loans and the strategy of lending to joint income have just enslaved the general population and the coming generation to the banks over the past few years.

However, the party is now over, the market has stalled through a lack of affordable FTB houses, unemployment is increasing and the possibility that interest rates will eventually rise is never far away on the horizon. The economy is in really bad shape and correctional forces that are beyond the control of our economist, banks and MP's are bearing down on our nation. I fear a perfect storm will eventually hit the housing market and many families are going to lose their homes because of the greed of our banks and their puppets we call our MP's. Don't blame the person in the street, save your anger for our corrupt politicians and banks.

It's amazing to me that when you read things like this, there are people who think that anyone who wants lower house prices are some sort of anarchist who wants to bring the country down. What exactly is wrong about wanting your children to have a better standard of living with some spare money in their pocket?

Can people really not see who has benefitted the most from rising house prices? This site explains how bankers have turned us into debt slaves.

www.thepropertycon.co.uk/

You want me to appreciate your crappy position? Let's flip this. My older dbro (34 like you OP) got a grant for uni. When I came to go 4 years later the grants were no longer available, even though my parents didn't earn a lot. This meant going to uni was not a viable option for me, financially. Just like buying a house before 2006 was not a financially viable option for you. Do I expect people your age to feel sorry for me and appreciate my position. No, I don't have seething resentment for those who went to uni before me. I was born at the wrong time to get the same help my dbro did. Is that his fault? I won't be told I should have pity for you. You got to go to uni, I didn't. I got a house at the right time, you didn't. Maybe you should think about the fact that you will have had some things others won't have. I am not upset I didn't go, its just one of those things. The timing was wrong.

DPrince - I guess the same could be said for a lot of things in life! Career choices, partner choices, lifestyle choices.

I feel very envious of people I started out at the same level at work with, who have gone on to become very successful and wealthy, but I chose to give up work after DS1 and be a SAHM.

They chose to continue working with or without DC's. They appear to be in a much better position than DH & me, but who knows whether they have had as much fun as parents,(or not as parents) as we have, and indeed whether they are in fact happy.

Maybe they envy me the lack of stress involved in being a high flying, working mum, or just being a mum at all.....

Appearances are not always a good indicator of the truth, whatever situation you are comparing yourself with.

What bothers me most about this is that you are on an interest only mortgage! How did you expect to pay off your mortgage?? Were you really expecting prices to rise forever and pay off your capital? We bought in 2004 and have always over paid as much as poss. Sorry you are in a mess but you have to accept responsibility for your own decisions.

I was badly burned in the last recession and am hoping to weather this one. I guess there will be at least one more before I die. Don't get het up about baby boomers. They did what we all would have done. Just keep on trying to deal with your own problems.

My parents had interest only, but they had to have endowment policy as well. So that matured to pay the capital.

I understand and sympathise with your plight

Look at the people who are in their mid-twenties right now though. They're generally in a terrible plight financially. They have massive student debt, a lot of them have no prospect of a decent job, and very little prospect of home ownership until they are in their late thirties or even their forties. No pensions of course ...

If there is one generation that is suffering, it's the 22-30 year-olds. We've bankrupted them. All of us.

The housing market was low in 1985-1986 adn then it started to go up and up and by 1989 house prices where double what they where in 1985.

Then by 1990 the crash started and the house prices came tumbling down and then didn't move until around 1998-1999 lot os people in trouble with all this in the early 90's when again prices rose and rose and then kept rising until 2008/09.

So now prices are lower again and then the circle will continue and so OP if you had done some research you would have known that things go in circles and that this was what would happen.

So Op why didn't you do your own research? Why didn't you look at how the housing market has reacted over the last 30-40 years to get some idea of how and when to spend your money? Why didn't you put a deposit down? Why did you take on a 100% mortgage? Why didn't you rent for a little while and then buy a house now when prices are lower?

Most people can?t see their greed, ignorance and ego was and still is being played with respect to owning property.

Its obvious to those with their eyes open that the amount of Property P0rn being emitted over the last decade from the TV (aka an opiate for the masses), countless forms of printed media like newspapers and magazines as well as other forms of media was going to sucker in so many people to take on unsustainable levels of debt on the belief that property prices can only ever go up. Get Real. Making money is never easy.

Couple it with the psychological competitiveness built into everyone in the form of a desire to keep up with the Jones using easy credit like Mortgage Equity Withdrawal (MEW) aka "a 2nd mortgage" to use the unspun definition of MEW, "unsecured" credit cards where the unpaid debts are actually secured as a Charge on the property deeds, is it any wonder why so many people are now just slave workers frightened to speak out for fear of losing their slave wage job that is covering the rent for their slave box, cost-a-lot hot beverages & i-throw-away-gadets lifestyle? Anyone familiar with the short tale ?The Emperor's New Clothes?? I dont like stereotyping but....

No one owns their property if they have a mortgage, they just rent it from the bank with the "liberty" of having to fund all repairs and upgrades to satisfy their desires! Some renters are smart people, for example if a renter put their money into gold playing the peaks and troughs (because its very liquid with no estate agent fees or conveyance fees tacked on) instead of a mortgage they will be able to buy outright a property today. So never follow the crowd it just drives up prices and creates bubbles and do enjoy doing your own thing.

Still like good little western world pawns in a global currency war you have done your country proud so far, just keep up your mortgage payments though, otherwise your standard of living will fall faster and more dramatically than the workers of China currently endure. If it wasnt obvious and judging by the countrys trade imbalances, they are after your jobs and lifestyle so are you prepared to work hard to maintain your lifestyle whilst bearing in mind we all live on one planet with finite resources and yet more sprogs being spawned to add to the demands on this finite planet?

Can you put up with the long hours, poor wage and poor conditions the chinese workers currently endure making your shiny precious consumer products including the oh-so precious twigs in vases that clearly does not add value to property?

Globalisation & competition can be cruel after all each new baby just increases that competition but don?t let the cognitive dissonance get to you as most property starts to fall into negative equity over the coming months, stop bitching about it, just get your heads down, focus your mind, innovate to either keep your employer in business or step up to the plate and create your own companies & jobs if one thinks they are up to it.

No one ever said life was easy, hardship evolves just like everything else evolves its just survival of the fittest and smartest so the choice is simple, you can either carry on moaning that life is unfair or you can do something about it playing within the rules (i.e. law) of course.

I hope more people wake up and smell the Roses.

Blimey, NoOneSpecial. I haven't read a post like that since I used to browse house price crash dot co. Took me right back it did.

Seething resentment I think is harsh. Anger against the govt -fair enough.

Not my fault the house prices went mental after we bought our house. However, despite being told how much we could borrow - we chose to borrow what we could afford, without stretching ourselves to the max. So would never in a million years take 100% mortgage or borrow. Samewith credit cards, loans and so on - if we can't afford it we don't buy it.

Why did you need to re-mortgage? Think you've been very very lucky that your DM helped you out. And interest only - blimey! What were your plans for paying off the original loan?

I think the whole property Market stinks.

I don't think we are winners, not losers either though, just bumbling along.

Dh got stung in the first property crash and when I met him he was living in a studio flat with massive negative equity. He rented it out, we rented together and eventually sold at a small profit years later.

We bought together when prices were on the rise. Paid £107k for a 1 bed flat, and sold for £138k 2 and a half years later when ds1 was 9 months old.

We bought a 3 bed house for £163k in a much less salubrious area and have been here since. Thanks to dh's astute financial planning and our IFA we had critical illness cover which paid out when I got cancer (every cloud and all that...) and meant we could extend this house and turn it into something more lovely. We are happy here but couldn't afford to move even if we could sell.

I wouldn't wish cancer on anyone and the money wasn't worth the hell I went through but it helped. So we are ok, not great and have a very average house but as a %of our income, the mortgage is ok.

My dsis and bil who bought at the top of the boom are planning to rent out their flat and buy a house now dsis is pregnant. Them, I worry about, it's such a gamble and from dh's experience, it's hard to break even with rental income versus mortgage when you factor in all the other costs.

There are very few real winners ime, most of us are just muddling through with varying degrees of success. I do resent living in the south, it's way too expensive but at the same time, I love the area and both mine and dh's jobs are here....

YABU. You're only struggling because you want to sell. Most people buy a house as a place to live and, if it increases in value, that's a nice bonus. Ask someone who bought a house in the late eighties, early nineties (me) whether negative equity has ever happened before.... and, surprise surprise, yes it has. Ask people who bought houses when interest rates were swinging wildly between 10% - 15% if it was all a bed of roses and... surprise surprise, no it wasn't. Luck is a big part of it but it's wrong to blame governments just because some people a) got a bit greedy and b) forgot to check their history.

Interesting thread. I follow house prices and the economy a lot as I've toyed with the idea of buying a place a couple of times. Yet, here I am at nearly 42 and still renting. In 1997 I chose to travel with my savings rather than buy a flat - I left the country for 2 years. When I returned in 1999 it took me several years to get near a position to be able to buy. But prices just rose and rose and rose and my sentiment turned from wanting to buy somewhere to not wanting to take part in the madness.

Friends of mine over-stretched themselves and now, despite being in huge houses with lovely kitchens, they are kept awake at night worrying. We were lucky to find a nice house with a nice LL and have been here 4 years. Our rent hasn't changed in that time. The only thing that I don't like about our situation is not being able to make big improvements to the house.

OP - I think you're right to feel anger at the government. The current situation is completely manipulated and is storing up trouble for the future. In reality, prices haven't been allowed to crash like they should have done. But the people who profited were just in the right place at the right time imo, it could have been me but I chose to do something else instead.

Now, all I see is stagnation everywhere. People stuck in their houses, unable to move. People like me not buying because prices are just foolish.

Where it will end who knows but as others have said, interest rates can only go one way from here.

I bought at the height of the boom, but knew I was doing so. It didn't matter because we planned to be in the house for approx 10 years so it didn't matter. We borrowed 3 times our joint income even though a) the bank were willing to lend us a lot more and b) there was a good chance that both of our careers would hit the big time within 2 to 3 years. We could have been foolish and taken an interest only mortgage for the vast sums that the banks offered us. We didn't. We were cautious. Why? Well back in the mid/late 80s my parents took the kind of decisions that the OP has taken. When interest rates and life curveballs came at them they were ill prepare and as a result we ended up homeless and spending a couple of years in a shelter/hostel. They too ended up resentful about everyone else around them instead of looking at how they got there . I live in a great home but I would rather have never owned a home than take such stupid risks that my kids ended up homeless. I am glad the lending rules are stricter now as some people need saving from themselves.

Of course YABU. Every generation is affected by the economy, and also by things that happen in their own personal lives. You chose to take on 100% mortgage, despite it being only about 12 years since so many people lost their homes due to negative equity (without as much protection against being thrown out as there is now I understand). You gambled. It turns out prices are lower now than 6 years ago, but you are only 6 years into your mortgage. Yes, I've benefited from the boom over the late 90s early 00s, but I sold at a massive loss in 1996, having bought (15% interest rate on that mortgage) in 1990. You have to look at the whole of your life, not a relatively small 6 year period. Over the next 15 years, things will probably pick up for you and people will be resenting you maybe.
Oh, and I agree with all the posters who say the vast majority of us buy and sell because the time is right in our lives, not as some kind of investment strategy.

We were on a repayment mortgage until the time came to remortgage and we couldn't get a deal.

I'm aware that 'seething resentment' is OTT and undeserved, but last night that's how I was feeling in my low, hormonal state. But actually, when in RL, show-offs (not the people I mentioned in the OP) bang on about their comfortable lives, travel and property prices, and are at our difficulties, I just think fuck you and your unearned profits. They just don't get it.

There seems to be an assumption on here that those of us who bought at the wrong time haven't scrimped and worked as hard as anyone else, which is also way off the mark.

Oh, another assumption seems to be that we overstretched ourselves. We borrowed 3.5x salary for a 2bed terrace.