in wondering what this generation of enforced renters are going to do

[mustbetimeforacreamtea]

When they reach retirement and can't afford commercial rents on a pension? What happens then?

By the way, there was a large housing correction in the early 90s, and that didn't have any catastrophic effects on the financial system

It crippled individuals. I know so many people who just walked into the bank or building society and handed in the keys. They were left with horrendous debts, not solely because they had to pay back the shortfall on top of rent, etc.

And it began the change in banking that led to the current situation, worldwide. For example, the restrictions on lending were relaxed after the housing crash in order to bump start house sales. All sorts of weird and wonderful offers became available for the first time!

And, surely tighter rental regulations would make property less attractive to foreign investors, not more attractive

I dont know, it might not be as attractive, but might still be more attractive than other opportunities available to said investors?

Yes there would be many people eager to leap out of the rental trap, but will banks grant mortgages to those people given that many of them wont have been able to save for a deposit?

Yes there would be many people eager to leap out of the rental trap, but will banks grant mortgages to those people given that many of them wont have been able to save for a deposit?

If there was a big sell-up of properties at the lower end of the housing ladder, then prices would drop unless something happened to stop that happening (but don't listen to me, I'm no economist ). I imagine that a lot of people in rented accommodation are already in the process of saving up for deposits.

Then again ... if rental regulations were tightened up to make renting a nicer option than it is now, tenants might not be so desperate to buy, so who knows?

I know so many people who just walked into the bank or building society and handed in the keys. They were left with horrendous debts, not solely because they had to pay back the shortfall on top of rent, etc.

Really? Your friends had very different experiences to mine - anyone I knew who was in negative equity just negotiated with the bank and away without owing anything - as long as they could prove that they couldn't afford to make the repayments, the banks let them off. I thought that was the usual way of things. Your friends should have gone to the CAB - it's pretty standard advice to get a write-off ime.

And negative equity only affected 10% of mortgaged households anyway, and most of them just stayed in their houses and rode it out. Your friends must be spectacularly unlucky.

During the 90s, Cruikshank?

It was the massive increase in interest. They could afford it at 5 or 6% but not at 16 - 17%. They got behind in payments, you couldn't get holiday payment or anything similar back then, so the debt mounted. Bad timing meant that they bought at the height, got into debt and lost the house just as the prices crashed. There was no 100% write off available, so they always ended up owing.

And they all took CAB advice, I went in with one couple as they were so distressed they were utterly incoherent. They were told that all of their options had been taken, handing in the keys was all that was left.

Very different experiences indeed!

Sorry, Cruikshank, but it sounds as though we are talking about completely different things/times.

Only 10% were affected by -ve equity ?? Not in our experience. Even our measly little flat bout for £22K lost about £7K, We did ride it out, cos it was so cheap.

That and cross posting maybe making us a little incoherent

Also, re the point about needing to build on land, this article posits that only 2.27% of the UK is built on. Plenty of space for everyone, and no need for flats. Yet. Even in urban areas, the built-on land only accounts for 52%.

www.bbc.co.uk/news/uk-18623096

Our problem is not lack of physical space - we have plenty of that. Our problem is people looking to profit from land and housing in ways that do not benefit the population, from landlords to oligarchs parking their millions to land-banking building companies.

Yup, 10%. And that is 10% of mortgaged households, ie not even 10% of all households (there is a difference). There was a big hoo-ha about it because it mostly affected the South, and there's always a big hoo-ha when journalists and their mates are affected by anything, but it really wasn't the massive national crisis that everyone was wringing their hands about.

Well, having lived through it and found it utterly horrendous I'll have to agree to disagree with you, Cruikshank.

It wasn't only 10% of our Midland homes and lives that were affected Our entire peer group was horrendously squeezed and all lived without a lot in order to keep mortgages serviced. Our flat was cheaper than renting, but it still pushed our wages to the limit when the interest rate hit 18%.

We were the lucky ones, we had bought small. Almost everyone we knew who bought a house hit very, very hard times.

I 'lived through it' too! There were ways of getting out owing the bank money even if you did have to sell. It only affected 10% of mortgaged households and most of those just rode it out anyway. I agree with Suzannewithaplan that it shouldn't have happened at all, and I happen to think that such an important matter as the provision of shelter shouldn't be subject to the vagaries of the market in such a way, but to present it as some kind of massive national crisis is misleading.

As I said, Cruikshank, our experiences of that time are very different. Maybe my friends were unlucky, maybe I knew every single one of that 10% Could you state your source for the figure?

I have always understood it was the biggest fall since the Great Depression and that unemployment rose dramatically, doubling on less than 3 years (1.5 million to 3 million) and that it took about 6 years after the height to return to 'normal' levels. So 8 years of high unemployment and recession - something of a crisis, I think..

Maybe that's the difference! Employment levels. My peer group was 100% working class, brickies, plumbers, bar maids etc.

Re how many were effected by the 90s crash, the bulk of those effected where those who hadn't been mortgaged for long (at that property), if you'd bought 20 years before, then you'd have a lot of equity, having bought when cheaper to start with then having paid back a lot of the debt already. If you were younger, say, late 20s/early 30s, most of your peers would have only bought a few years before, have paid more for their property, paid off very little of their debt.

While it might have only been 10% of the owner occupied who found themselves in negative equity, those would be concentrated in the younger owners, so not surprising someone that age would know a lot of people effected.

A crash now might be a more spread out problem, a lot of people have viewed their equity as their money, remortgaged to release that money, meaning those older people who bought 15+ years ago don't have most of their debt paid off already.

Yes, Mary. We were in that age bracket and all new mortgage owners, probably all 2 - 5 years into term. That would be a factor.

in other European countries renters have more rights. Personally would much rather be in negative equity than renting as long as I was able to keep up repayments, I wouldn't have a landlord to move me on at whim.

True, negative equity only really matters if you want to sell.

I was too gobsmacked to get past the initial few pages.

I earn a lot less than £20k. I have debts. I am above the threshold for HB so I don't get it. I could about as much buy a house as I could fly, and saving £50 a week, you're having a giraffe.

I will rent until I die because I'm never going to be in the £50k category. I'm not sure I'll get to £20k before I pop my clogs at 80+. I don't know what will happen to me at all, all I do know is that my parents aren't going to pass money on they don't have and I am broke. There are loads of people in the same situation I am!

One solution - revolution :)

The old and the ill and the workless will all live in the bloody horrible student accommodation that is being thrown up in every university town. The slums/workhouses of the future.

It is really depressing.

I am in my forties with no pension to speak of (though thankfully own most of a house, due to inheriting tragically early) I am frantically trying to think of work I can do into my 70s.

googoodolly, don't get disheartened even a small amount saved over time can do something. My cousin saved just 150 quid a month for 4 years and used that money as a deposit for a BTL in Kent, the rentals she receives is double the mortgage repayments and the other half goes towards her to rent on her current house. In a few years she will cash in and either use the money as a deposit for a family home or re invest for the future. IMO a good pension and savings for the kids and enough income to pay your outgoings outweighs a hefty mortgage which many will still be paying into their retirement years anyway. Many home owners are one interest rise away from knocking on the council door for housing, so dont worry if right now you do not have the funds to save for a deposit, yes prices are going up in some areas, but tomorrow your fortunes could change!

Why not change strategy and save to buy outright? Could you not save and purchase a buy to let, for example there are many cheap homes with steady rentals in Maryland USA, you could purchase land aboard or even here in the UK, in Wales or Ireland, even parts of Kent where yields are high, within a few years you could cash in and get a family home?
A mortgage is not the be all and end all, I live in a 4 bed flat, mortgage free - I took the save longer route and changed my expectations, bought a spacious but grotty fixer upper and also purchased very cheap rentals abroad. I could move to a house now, but Id like to stay in the same area and no house that I have seen has a garden to match what I have now  That aside what im trying to say is, you mentioned that it is hard to save but if you can find the extra monthly savings somehow, within a few years, what you have saved would certainly get you an investment elsewhere from your current area.
There are many other ways of preparing for retirement and investing in future than home ownership.

Shocking, there are many paths to home ownership as I mentioned in my earlier post. Slow and steady wins the race! 50 quid a week is 5200 quid over two years which can buy the cheaper, easier to rent investments all over the world. The SE or the UK is not be all or end all. You could still rent but invest in art, antiques, land, businesses, property abroad.

Agree with the workhouse concept though it may be a virtual workhouse. Though people survive longer, I am unconvinced the quality of health of older poeple when on medication for long term conditions such as heart disease/arthritis/cancer etc. I dont think older people will be healthy enough to enable people to work full time into their late sixties along side 20-40 year olds as the government seems to have calculated.

All that is happening and will continue to happen is that the over 55's will be in competition for part time jobs with young mothers.

Anyway, earnings of the over 55's will go down, except for those who were in a wealthy workstream anyway. Savings will have gone to pay for the education and house deposit for children and grandchildren. Housing benefit will inevitably disappear as the country isn't getting any wealthier and this government deson't support the needy.

The older people will be forced to do low paid piecemeal work far from home for long hours with no job security or sick leave benefits just to put the bread on the table let alone pay any rent. It will be the workhouse.

'Could you not save and purchase a buy to let, for example there are many cheap homes with steady rentals in Maryland USA'

BTL is very strongly discouraged in many US states with shocking taxes, as is allowing foreigners to buy properties to rent out/absentee landlordism.

Because it leads to the fucked up situation we have here.

Where are all these tenants who want longer tenancies - I own a house I rent out and have had 4 tenants in 5 years. Every one I have offered longer term lets - I'd consider up to 10 years and every one has preferred the flexibility of being able to move. When advertising the property I also say this. I also allow pets and wouldn't mind if someone decorated. Would probably help with the cost if it was neutral!

Not all landlords are evil!