To think no one has a right to make money off their house

[Laughingstock1991]

The general consensus among financial commentators this week has been that the housing market has turned. Interest rates are still going up and are unlikely to come down for a few years. The low interest rate financial experiment that has been in place since 2008 has ended and it’s unwinding is going to be painful. The housing boom was based on cheap credit.

My mortgage is likely to go up about 400 a month. Lots of commentators reckon we are in for a big fall in house prices. Good thread here:
https://twitter.com/EdConwaySky/status/1668987423643119623

What pisses me off is the absolute assumption made by some people (like my friend today) that the government should use public money to bail out mortgage holders. Most people were stress tested on their mortgage- I was- and yes it’s going to be tough but do I think public Money (renters money) should be used to bail out mortgage holders- fuck no! The Lib Dems have raised this also today.

House equity is unearned wealth. There are no guarantees. We have been through a boom and now it’s going bust. Hopefully sanity will return & housing will be seen as a home again- not an investment. Its not a ‘market’.

And I say all of this as a homeowner who is going to have to pay a lot more. I want everyone to be able to afford a decent home- not just those with money.

I don’t think that’s unreasonable!

Even when mortgage rates were low, you still pay back a lot in interest over 30 years or so.

The lenders get their money back almost twice. Buy a house for £250k you’ll probably pay back £400k over the mortgage duration.

Jesus wept indeed.
Nobody is saying that it's their 'fault'. We're discussing whether or not they should be allowed to buy the property. And the answer is no, because it is not there to give them an asset. It is there to provide a home for life, not beyond.

Also... 60-70 years ago council housing was NOT just for people on low incomes. It was for everyone. Had it remained that way we would not have the issues that we do now, leading to it being so restricted and only for the 'most in need'.

Right to buy was not a bad idea IF it was used to actually build more houses, but that never materialised. So they will either have to get off their arses and start building, or stop selling off the little that's left.

Surely the government are not going to consider this.

Printing money got us into this mess, printing money to help mortgage holders is not the answer.

The answer is let them default.

So where is the money for paying all of them benefits going to come from?
Especially if the mortgage is cheaper than rent, or the cost of temporary housing.

@TooMuchToDoAndNoTimeAtAll where at any point have I said ‘I’m alright Jack?’ I already said my mortgage was going to go up loads. I’m as much at risk as anyone else. Even with that: I don’t think there should be a bail out.

Where and when was approved these mortgages bail out? Links please.

I do not see a crash happening because respectable economists are saying the interest rates will come down. Mortgages will be approved but interest will not go to 1.49 %. People won’t make much more money from their houses anymore so do not fret about unearned wealth. In fact in London after the raise of stamp duty introduced by Osborne many people started doing basements and extensions rather than moving. After Brexit London prices bar the best areas have remained the same for years.

So where is the money for paying all of them benefits going to come from

Where do benefits come into this? They buy a cheaper house with lower mortage rate. Horrific as that might sound to some.

Didn't the Liberal Democrats consider it, it wasn't the government

@rainingsnoring I really don’t follow you. Obviously our population grew in the years you mention and property prices went up. They didn’t stay at 1990 prices at which point there was a reduction in values and negative equity. With generous mortgages, lenders ensured ordinary folk could get mortgages. Home ownership grew. Private renting grew too. The problem we now face is shortages of both rental and homes to buy. Obviously availability of mortgages affects ability to buy. Not to rent. So why are rental prices going up? Because there’s insufficient property.

Ws have never adequately housed everyone. We also need to stop getting divorced. Mums and dads living in two family homes doesn’t help. Accept we need to build what we say we need and scrap many planning restrictions. This is the only way to help more people. Plus we need to accept single person housing is wasteful. Buddy up to buy!

Shall we say it again for the people in the back @AscensionToCheese

MOST RENTERS DON’T GET HOUSING BENEFIT

Hit the nail on the head here. People don’t seem to understand the hypocrisy. I bet most of them were happy to take the bailout of furlough payments too.

Are you actually at risk of losing your home though? Or are you comfortable enough to say "oh it's hard mortgages will go up, but we have spare in the bank so we'll b fine.."

Here’s the link dem proposal https://www.theguardian.com/business/live/2023/jun/16/mortgage-rates-uk-government-urged-to-provide-emergency-help-costs-rising-nationwide-liberal-democrats-business-live

@TooMuchToDoAndNoTimeAtAll well I don’t know yet. Depends how much rates go up. Stop making assumptions

BUT NEITHER WILL MOST MORTGAGE OWNERS.
Only those who will lose their homes because they can't pay.
Isn't that obvious?

I'm sure Sir Ed Davey was banging on about this about a year ago, it was quite a while, can't remember exactly when, he was on BBC breakfast or something like that

@AscensionToCheese So you agree with this post I was responding to then? Because I think it's absolutely reprehensible.

What annoys me is those renting/counil who get the majority paid for them and then get the right to buy!

Blame govt policy, not the families who bought/buy their council homes ("those" as PP refers to them)

Luckily economists think it’s a shit idea too

If a lot of people suddenly lose their homes the government will have to pay out anyway.

Why have you come to that conclusion ? if you lose your home that doesn't mean you lose your job, you will just have to revert to paying rent out of your wages instead of a mortgage surely ?

that's semantics - unless PP said 'those who buy it are disgusting' or something to that extent they are probably annoyed at the policy.
If I was offered such a great deal I'd take it - who wouldn't?

How is equity unearned wealth? People pay their mortgages with money they earned, for the most part. If you really don’t want people to make money from property you should vote accordingly. The democratic process will let you know if most people agree with you, or not.

Here is a thread from when Ed Davey first said about it, it was last November

https://www.mumsnet.com/talk/am_i_being_unreasonable/4671427-renters-getting-shafted-yet-again

The wish list of the Lib Dems party is endless. I would not pay attention to that. They have not mandate.

Rents are usually higher than mortgages (unless you happen to not be paying market rate). And it's very difficult to get one in the first place - your income is stress tested. So if you can't pay your mortgage... it's very unlikely you'd be able to pay rent!

Banks also have a duty of care, they don't swoop in and repossess the moment you miss a repayment. It takes a few months of not paying, they will also offer other options like a payment holiday, interest only, etc.

Repossession is a last resort, after everything else has failed. And as people will cut absolutely everything before they lose the roof over their head.... you can bet that they will be in dire straits and needing government aid.

Luckily economists think it’s a shit idea too

It is a stupid idea. It is not practical economically anyway. If this were implemented the markets would go apeshit and the pound would tank thus screwing us all even more. I dare say some people are just suggesting it to get some airtime.

It is a complete non starter.