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!

Are you actually kidding me ? How do you think from benefits.

This is why, as I said in my first post on this thread, it's going to get bumpy.

The ever increasing wealth divide prevalent across the globe is being brought into sharp focus in the issue of property ownership. This will increase social tensions and if this thread is anything to go by, its going to divide a lot of people. It's inevitable because shelter is at the top of the pyramid as a basic need for everyone.

The UK government, like many governments can't just buy us out of trouble this time. We need proper forward planning.

When buying our house we deliberately didn't overstretch ourselves - stayed in a 1 bed flat for as long as possible (offer on house to complete shortly after the birth of our second), to put ourselves in the best possible position financially. Borrowed an amount that scared us, but would be affordable if interest rates rise or one of us lost our job and had to take something lower paying.

But, we didn't account for all of those things happening at once, or the cost of everything else rising so much.

We're still in a good position: both still have jobs, 2 years left on low interest rate, can afford bills - just can't save as much as we were. That's a much better position than a lot of people, and I do feel lucky.

But it's only part luck. I know plenty of people that have stretched themselves with massive mortgages and house renovations and are living in amazing (finished!) houses and have lovely holidays each year. I'd begrudge them being bailed out, but would also feel awful for them losing their homes.

But our house is technically bigger than our needs too (spare bedroom/office room), and we could have gone smaller.

It's tough, and there's not always a right answer.

The average person can be forgiven for not realising everything would go to shit at once. But lenders should really have been more careful about lending these huge amounts on low interest rates.

You continue to wait for scraps this country has become more expensive. Even if you bought a house you can't afford the mortgage people are paying over £1500 per month only the wealthy can afford homes. Voting Labour will not change a thing I was paying a high mortgage when Labour was in power. This country is run like a business that wants to make as much profit from you. Once you understand that concept then go ahead and make an investment. The government and the experts warned you.

If you are somebody who needs to find someone else to blame, blame the estate agents and banks for having no moral compass and only wanting to look at their bottom line. Lending on only one salary per property and fixed fees for estate agents rather than percentage of sale price could have prevented a lot of this house price inflation. This is partly the market rebalancing after the panic
moves and resulting price inflation during Covid IMHO

As long as you just intend to live in your house, negative equity isn't an issue. It only becomes an issue when selling or remortgaging.

I think its outrageous that people are able to borrow huge sums of money without being sufficiently stress tested, considering rates have been kept artificially low since the financial crash, and they're really now only around what they were before it. So people borrowing hundreds of thousands of pounds at a super low interest rate should have had to demonstrate affordability should the rates restore to their proper level.

I don't think we should be using public money to bail out mortgage holders. We shouldn't be funding the acquisition of assets for anybody. I'm sure benefits don't allow for it either, so those on housing benefit don't receive contributions towards their capital payments.

Thatcher only did it to win votes in the short term so why would she care about replacing the social housing stock? Short term thinking is a characteristic of career politicians because they only care about the next general election.

Same with Boris and his plan to extend Right to Buy to tenants of housing associations - short term thinking to increase his personal popularity (amongst HA tenants) at the expense of an even bigger lack of social housing problem down the line.

If benefits allow you to save for a mortgage deposit they are too generous and your benefits are reduced over a certain amount of saving so how does that work? Are the savings not being declared?

Tax credits allowed you to save up to £16,000 before there was any deductions. I believe it £6,000 on universal credits yet another reason why they keep people poor.

But if I had to not declare the savings in order to get out of that situation so be it. I certainly wouldn’t lose any sleep at night about bettering my situation.
I have other friends and benefits who do something called matched betting which doesn’t get deducted from benefits and allows them to save for treats. The difference is they spend it on crap like buying a new designer dog and I spent it on buying a house.

As for being too generous, it’s all relative, isn’t it? Some people really struggle on benefits and it’s not fair for a moment to suggest that they are receiving too much because they absolutely aren’t. They just didn’t have the education that I did in order to maximise the cards I was dealt.

The numbers are on statista or something but widely available elsewhere. You're classed as a homeowner even with a mortgage but the ratios are harder to find.

The ONS provides figures for all homes for 2020. The percentages are slightly different to those I quoted earlier but is because I was using Statista. I'm assuming the ONS figures are more accurate.

www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/researchoutputssubnationaldwellingstockbytenureestimatesengland2012to2015/2020

This model estimates that in 2020, across all local authorities in England, there were 23.2 million households living in 24.7 million dwellings.

Of those 24.7 million dwellings, just under two-thirds (64%) were estimated to be owner-occupied in 2020. For most of this analysis, this is broken down further, giving the following four tenures:

8.8 million (36%) were owned outright

6.8 million (28%) were owned with a mortgage or a loan

4.8 million (19%) were privately rented

4.2 million (17%) were in social rent, mainly rented from housing associations and local authorities

Self-certification ended with the 2008 crash. Again, you might be angry at people who bought that long ago or longer and who have seen such huge rises in the price of their property but that isn't who you're kicking now. Those people are fine. The people who will suffer are those who bought recently.

I assumed that, I just wanted you to clarify.

Here you are gloating that it is easy to buy a house because you have bought two since arriving here in 2015. However, unlike most people who work hard and save, you milked the benefits system to buy yours.

I guess you also think the government (hence other taxpayers) should help you if you struggle to keep up with your mortgage payments?

Milked the benefit system ? I was given what I was entitled to. The fact that I spent it on buying a house, rather than what other people might use benefits for is to my credit.

@User98866
in the 90s recesssion my dh lost a house & flat
him and wife got a really nice HA house & when they split up he got a 3 bed Council house
this was in the mid 90s and they both got places within weeks

That’s a really good idea, rather than handouts for all why not force the banks to allow people to just repay the interest (and hopefully some capital) for a while and the mortgage term is extended accordingly? Stress test people to set a sensible repayment amount, perhaps, maybe no more than it is currently and extend the term? Doing this means people stay in their homes.

I would suggest if you can afford to save enough for a house deposit out of benefits, you were getting too much. There is something fundamentally wrong when people who actually WORK for a living, cannot afford to buy, but someone on benefits can.

Yep, and I'm second generation too.

Why is the story so full of holes? I appreciate MN is a bit crazy but I'm basing my comments on my life experience and what I've seen around me

An Indian friend of mine is also second generation. His parents arrived with just two suitcases but no kids. They set up a shop in the 60's to serve the community and retired at 50 after buying property here, in India and having three kids.

I've colleagues who've come here as professionals without much but then saved deposits whilst renting and now own their own home. Quite recently too so have paid ridiculous rents in the process.

You haven't said what type of benefit.

But I call BS. My parents struggled on benefits for years (mostly while working, short period of unemployment). There is no way they could save enough to buy a house. They were barely surviving. No designer dogs, no holidays. Living on benefits is not easy, and I suspect you're just trying to increase the hate on benefits claimants.

Lol you have no idea what I do, or do not have now. Not that you said you did. But it’s quite extreme. DP and I joke that we are both the poorest and richest people we know simultaneously depending which way you look at it.

We played the sensible game. We moved out to the lower earnings area so we could buy a small place on minimum wage. We put our seven years EACH of higher education aside and ground it out in everyday service jobs. We haven’t been on a non-family holiday for over a decade. We have moved up the ladder bit by bit sensibly. Renovating shitholes. Selling moving on. In that time we set up a business to use our degrees. I have 4 jobs, my partner 2.

We currently live in a gorgeous house. It’s big, people would say here we probably shouldn’t be entitled to it. But I have lived in a garage for two years whilst it was ripped to shreds and renovated. Poured every penny I have into it. Not had a kitchen for two years. Still don’t! Went to a toilet in the garden for a year.

To say we haven’t earnt this is not true. We have 60% equity. We sacrificed a decade of our younger years. We didn’t do the London fun, nor the travelling, nor the pubs because when we finished our day jobs we were either working on our business work or renovating houses.

So I am not being flippant when I say I think I will go fuck it if we lose this house and our equity. I will be taking that decade of fun back. My son will be fine as he has a healthy inheritance coming his way from grandparents. Sure, non of our faults. Unlucky. But I would be a fool to play the game the ‘correct’ way again.

It is a good idea to extend the term to make repayments lower, lenders do in fact already allow this facility.

Only problem being that a lot of younger people already have very long terms. My mortgages have all been 25 years or less but my daughter who bought last year had to have a 30 year mortgage to make the payments affordable for her. I understand it's not uncommon now for new FTB mortgages to be up to 35 years.

I presume profit also drives building new houses? If there was no profit in that why would people bother?

House equity is largely an illusion. When you take out a mortgage over 25 years you will pay back about 3 times what you borrowed. Factor in inflation each year as well and in reality any kind of equity gain is largely non existent. There are still people in negative equity who bought back in 2008!
I agree that the government shouldn't bail out mortgage holders but at the same time I do not begrudge mortgage holders seeing their house rise in value in real terms (although for most people that is rare); good for them at least they are not vying for social housing and taking responsibility for themselves.

You think I’m trying to create haters for benefit payments when I just said that it would be unfair to say that everybody can save for a house deposit whilst on benefits ?

that doesn’t make any sense. And I don’t care if you don’t believe me, I’m sat in my lovely house happy

I don't think @3BSHKATS should feel obliged to give every personal detail to people on the internet who after all, probably wouldn't want to share their own personal details re how they made their money (if they made any) or exactly which benefits they have received.

If you don't believe them fair enough, but let's not get too personal.

Perhaps people who work for a living, should try harder.