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!

sorry, I am 25. The 7 is a typo

Entitlement is right on.

Some really odd attitudes on this thread. The level of entitlement is astounding though perhaps it is to be expected after the recent monetary largesses.
'I've contributed more than x and y so I expect to be bailed out by the government' 'It's part of the social contract'.

The likelihood is that the government will put a lot of pressure on the banks to form agreements with their customers so that they can retain their homes so that people are effectively renting from the banks just as renters rent from a landlord. Some people will choose to downsize or move area or move in with family if they can. Many will scrape by. All of this will induce a very large recession. They will need to be absolutely desperate to introduce a bail out mortgage holders scheme and it would be hugely unpopular and it would cause plenty of other problems too.
Either way, imo, a very large fall in house prices is nailed on at this stage as is a huge financial crash. It seems likely that the government will continue to make stupid decisions and restart QE possibly sooner rather than later and cause hyperinflation which leads to the destruction of the currency.

We are a few decades too late to be recommending these noble aims!

Thank you. They have no idea what it is like.

I get your point but it's not really.

A renter just needs to find the rent and has zero accountability or responsibility. All maintenance, repairs/replacements are covered so rent should be more expensive.

A renter has the luxury of never having to acquire an asset. That responsibility falls on someone else.

@SamanthaCaine but as I have said all along, a lot of renters are only renting because housing is too expensive. And is is posted in this very good thread. A bail out would be inflationary too:

https://twitter.com/TimPitt11/status/1669340369094578177?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1669340369094578177%7Ctwgr%5E48e99d28ec77880a7d0c83016034ab474612ed24%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.theguardian.com%2Fbusiness%2Flive%2F2023%2Fjun%2F16%2Fmortgage-rates-uk-government-urged-to-provide-emergency-help-costs-rising-nationwide-liberal-democrats-business-live%3FfilterKeyEvents%3Dfalsepage%3Dwith3Ablock-648c1acc8f08c1a38208953d

Even now in 2023, most of the electorate still live in owner-occupied homes. As long as that remains the case, I predict that there won't be more than a modest house price fall.

For all the claims that the Bank of England is "independent", the government has the power to pull the strings if they want to. It's a decision to raise interest rates in an attempt to lower inflation, a decision that can be changed. Allowing high inflation effectively transfers wealth from savers to borrowers - and ever since 2008 the government has been desperate for us to all borrow not save to prop up the economy.

I’ll trade you my luxury of not acquiring an asset for your hardship of owning an asset worth hundreds of thousands of ££ any day of the week. Just PM me and swap you for me on your title deeds- will happily give you my luxury for free.

High inflation triggers higher returns on savings. As we are seeing. The borrowers pay more. They do not accumulate wealth unless house prices go up. Assuming they don’t have savings.

I'm not even sure where to start on this, it is so nonsensical.

Well ackshually - Support for Mortgage Interest is available to homeowners claiming certain benefits. It doesn't cover the full mortgage payment (and it's a loan repayable when you sell), but then UC or Housing Benefit usually don't cover the full rent payment.

The thing is that unless something is done about the interest rates the economy is going to collapse. For the majority of the working people their housing is dependent on mortgage, whether you own your home with mortgage or rent with your landlord having the mortgage. With the rising cost of housing (higher mortgage payment or rising rent due to increase in mortgage payments) you're going to have less money to spend. Less money to spend means businesses suffer due to decreased demand. Decreased demand less to loss of jobs which leads to further demand. People default on their mortgages and with decreasing property values they may have nothing left after paying thousands towards the mortgage. Same with tenants, landlords default, properties are taken over by banks and tenants are gonna be homeless competing for place to rent with all the people who previously owned their homes.

I highly doubt that property prices are ever going to drop enough to be easily affordable with most people struggling to save anything in the current economic climate, let alone saving enough for a deposit.

We’ve greatly improved every house we’ve owned. Of course we expect to recoup those costs when we move. Why is that u unreasonable?

Why don't you try? You might even be able to put a reasonable argument together why renting should be cheaper than buying a home.

Or maybe not.

@MrsSkylerWhite but it’s the fact you expect it. In a falling housing market, it doesnt automatically work like that. It’s just it’s become expectation during a housing bubble. As someone said on one of the feeds I follow, ‘stencilling live, love, laugh on your wall doesn’t mean you are entitled to an extra £20k on the price’

i bought my house on a government scheme with borrowed money after sitting in the council list for donkeys years. If I fall into negative equity, and I’m not supported by the government to stay in my home, you do know they’ll be forced to subsidise my rent, put me on social housing (I would massively struggle to be accepted for private tent due to disability)
if we don’t help people stay in their homes we will have to help them be housed another way

How many pensioners still have outstanding mortgages? They're not going to be affected by rate rises.

On second thoughts, what I think is most likely is the government pushing mortgage companies to lengthen terms instead of large-scale repossession. That will stabilise the status quo now and kick all the resulting problems into the future. (Resulting problem being that most people will end up lacking wealth to pay for their care in old age, and their children will inherit much less.)

Laughingstock1991 · Today 23:16
@MrsSkylerWhite but it’s the fact you expect it. In a falling housing market, it doesnt automatically work like that. It’s just it’s become expectation during a housing bubble. As someone said on one of the feeds I follow, ‘stencilling live, love, laugh on your wall doesn’t mean you are entitled to an extra £20k on the price’”

🤣
We’ve owned 6 houses over 30 plus years and pretty much rebuilt them all. But ok.

I'm not claiming home ownership to be a hardship. Just that there are significant costs involved with owning a home that a renter doesn't have to worry about financially.

I'm not saying one is better than the other as I've done both. Neither am I saying that renter's don't have their own issues, just highlighting a few reasons why renting is more expensive (although obvs there are other reasons).

Agree OP. Mortgage holders should not get bailouts, I’m blown away that’s even being suggested.

Why do you think that losing one’s home automatically means receiving benefits for life. Presumably, people who own homes have jobs to finance their mortgages so are unlikely to be entitled to benefits.
I don’t strictly object to mortgage payers’ bailout but, in the name of fairness, I’d like to see similar scheme extended to private renters.

The opposite if what you said. The renter does not have the luxury of acquiring an asset.
Hope that explains it clearly enough for you.