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!

for me its down to priorities-

i couldn’t careless whether Jeremy and Jemima in their 1.2m house might lose equity or have to cut their maids hours to meet the shortfall in mortgage payments

i do care if John and Julie, who have worked their bxllocks off to scrape a deposit whilst renting for the last 10 years, had to overstretch just to get on the ladder and now are facing eviction due to mortgage arrears and their house is in negative equity, so their hard saved 25k has vanished

YANBU at all. I suspect the tories are wondering how to win back some votes. There’s no council houses left to sell really so what else can they do to bail out (largely) a demographic who may consider voting Tory (on the whole).
I hope house prices come down somehow to a more affordable level! The current situation is not sustainable.

The problem is, the rain falls on the just and on the unjust. Anything that meddles with Jeremy and Jemima will also affect John and Julie, and probably to worse effect.

@Chatterbuginabox It’ll be claimed that it’s too expensive to means test as per the heating allowance in the recent 70 quid applied to the heating bills. Either everyone will benefit or nobody will I’m sure we can guess which

I've just sold after 4 years and yes my house has gone up in value but minus the moving costs, solicitors fees, surveys, estate agent fees, land tax, paying off improvement loans etc I actually have little left. You need to set aside about 15K at least to move comfortably.

@rainingsnoring Flats have sold in DDs building. Two recently. So I do think the prices are what we would expect.

I think it's a shame that in the UK it is regarded as a failure if you rent.

In Germany it definitely isn't, many people rent and renters enjoy a lot of protections that don't exist in the UK.

I think the UK government should implement more protections and rights for renters, to protect them from greedy landlords.

I saw this but thought the Lib Dem strategy was more of a stunt to highlight the moron- tax mortgagees will pay after Truss crashed the economy- rather than a serious policy… if it is serious, agree not a good use of public funds but we will see a rash of repossessions

it costs a lot of money to maintain a home, and some homeowners certainly do add value to the home with upkeep and improvements.
i see no reason why it's considered unearned, not to mention taking risks of developing living in certain areas and potentially improving area's that have decayed.
how much added value does this translate to?? that's the issue.

I bought on my own when rates were 6.9% and could barely survive for several years. My next home was very modest, I would have loved to stretch myself and buy in one of the nice roads but knowing how much rates fluctuate I didn’t. I think when buying a house you need need to think about the fact that rates can soar and need to build in a buffer. I don’t particularly like our house, it’s a small terrace but I didn’t want to risk being in a precarious situation. I don’t know how I feel about bail outs. It means people won’t be encouraged to be cautious with house purchases, so some of us will end up paying the price for those who stretched themselves to get their ‘dream house’. I do sympathise with first time buyers though who have only recently bought.

People that buy their house when the prices and interest rates are low, then sell once the prices come back up, have absolutely "earned" the equity in the house.

What a load of tripe!

I had to work during lockdown whilst watching people sit at home on garden leave. I wasn't particularly impressed by that. I would definitely be far less impressed that having gone without to try and pay off my mortgage, people in bigger houses who took bigger risks should somehow be "rewarded".

and as I am a single parent with no pension, it's just as well that it has worked out.

This is another reason for the distorted market. People don't understand pensions so have put they money into property.

that not they

I had to work during lockdown whilst watching people sit at home on garden leave. I wasn't particularly impressed by that.

I don't understand this narrative. I worked because my industry was open. I never expected those who had their jobs stop to sit indoors rocking in the corner just because I'm working. And if I was furloughed I would have received a pay cut so was happy to work tbh.

Its never going to happen. The people in this thread clamouring for it don't understand economics.

Any "help" would be financial, which would in turn stoke inflation further.

So the result of that is that inflation would stay higher, for longer.

Which then means rates would have to stay up for longer as well.

So mortgage interest would keep being high.

So the "help" would then turn into tens of billions of ££ over several years.

The chances of that happening is effectively zero given the state of the public finances.

So my suggestion is to cut spending to the absolute bone, live frugally, and prioritise your mortgage payments because no help is coming.

It doesn’t even work that way anymore either, we buy a house, we live in it, the government then sell it off to pay your care home fees, or take a big lump sum from it for inheritance tax. Then people complain if they Government help home owners. I think homeowners pay more than enough tax to receive some support

I had to work during lockdown whilst watching people sit at home on garden leave. I wasn't particularly impressed by that.

What specifically weren't you impressed with? What do you think should have happened? If you had been furloughed would you have just resigned instead of accepting the wage? Genuinely interested to know @pollymere

Why shouldn’t we pay our own care home fees? After all we don’t need the house any more if that’s where we end up. If a million quid free and clear before they have to pay inheritance tax isn’t enough of a windfall for our kids, we’ve made a pretty shitty job of bringing them up.

Well if they could finance the mortgage they wouldn't have lost their houses, would they? As I've said upthread repossession is a last resort and only comes after everything else has been tried including a temporary break in payments, switching to interest only, etc.

And because of high house prices and rents are it's very hard to get back on the ladder once you've fallen off, so it's likely those people will be n benefits for a long time.

Put it this way - if people are in dire financial straits that they'd qualify for Housing Benefit. What is wrong with that benefit going towards a mortgage instead of rent?

Also @Catza renters can already receive housing benefit.
I don't agree with paying ALL of the mortgage of course, just as how renters don't get ALL of their rent paid.
But in the current situation of a shortage of social housing AND private rents it seems silly to withhold any help until people get kicked out , so that you can send the housing benefit straight to the pockets of landlords!

Every time someone is outbid for a house, it is because someone else who is richer than them, or deemed by the banks to be a better credit risk than them, wanted that house more than they were able to justify spending on it.

The issue isn't house prices. It's that too many people who think they ought to be middle class are, in fact, poor. It's that incomes are unevenly distributed.

Increase wages for those in work. Houses will become more affordable. First thing Margaret Thatcher did when she came to power was give the Army and Police a pay rise worth more than 30%. Do that for teachers and nurses and it would more than take the edge of those mortgages rate rises. It would support those at the start of their careers more than those already established in theirs, but it would benefit everyone in work.

The greedy banks are to blame. The government and the Bank of England can easily resolve this issue. It is the government's fault that inflation is high. They can start by lowering taxes and regulating banks.

Why should the working classes work their bloody socks off and pay whopping great big rents to greedy landlords and have nothing to show for it?

It's not about bailing people out because the govt cares! It's to get more votes! Rising mortgage rates are going to cost the Tories votes!

It’s not their idea it’s the Lib Dems