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!

I don’t actually agree with the no one can make money when they sell

But I do agree that we shouldn’t bail people out

Thatcher a played, an absolute blinder by making everybody middle class. Homeowners don’t strike and they don’t riot because they’ve got skin in the game. Remove the skin in the game things could get very awkward for whoever is in power. No Party likes awkwardness in the shape of an angry mob who’s been made homeless on mass with no provision for where they’re going to live.

The UK population has doubled since Margaret Thatcher was in power there for the problem has doubled. I fully expect them to introduce something along the lines of MIRA’s shortly. The banks are already being told to rein it in terms of interest rate rises.

@SunnyEgg its not so much that I don’t think anyone should make any money. But the housing bubble has created lottery win levels of equity for a lot of people and meant that anyone not owning a house is permanently locked out due to ridiculous prices.

There has to be a normalisation - it’s creating enormous social problems in this country.

That's great, but 'we should go back in time (to before I personally was born) and become Vienna rather than vote in Thatcher' also isn't a practical solution, is it? You can and should look at long-term policy change and I have and will always support that, but people are about to start losing their homes in large numbers very soon and you need a more immediate plan for that too.

No, the vast majority do NOT do that - a subset of the middle class do that (the upper class have trust funds and other tax-dodging ways to pass stuff down the family).

The vast majority never buy, or if they do, the house has to be sold for care home fees. It isn’t “part of the social contract” that your kids get a million quid when you die, at all. Ludicrous.

@Hardbackwriter i’m not saying go back in time- I am saying it has to be sorted out. It’s affecting everything!

Can't agree that property is unearned wealth.... If I pay my mortgage back over 25 years at 2% interest rate I'll have paid back over £150k in interest for my house! So really unless it goes up more than that I'll have paid £150k more than the asking price of my house.

And the government bail out renters all the time, topping up rent or psyjng it in full. It's only home owners who don't get help even if they are on benefits.

We should not bail out mortgage holders as that would artificially prop up the housing market. There will be unfortunate people who are victims of it crashes but it will be better for the mayority.

Some people on this thread blow my mind. We’ll all end up paying either way, I’d rather help those who help themselves. Mortgages are too large and too risky for many many people, but what else were they supposed to do when social housing is taken (to a large degree) by non working people with no intention of contributing. This country is screwed.

Exactly. It’s those of us who have only recently managed to buy a house after years in expensive rentals while simultaneously scraping together an extortionate deposit who will suffer, not those sitting in their mortgage free house who ‘don’t mind if it loses value’.

@Plankingplanks And the government bail out renters all the time, topping up rent or psyjng it in full. It's only home owners who don't get help even if they are on benefits

Most working people arent entitled to any benefits. This is a fallacy that’s often spouted out in these types of discussions.
Most renters have to absorb unregulated large rent rises & no security.

Generally home owners don't profit as such from their homes. If you only own one home the fact that your home has increased in value by x% since purchase is irrelevant, because all of that equity you have gained in your home has to be used for your next home. You only gain if you die without having to use your home equity for your nursing home. Property prices must increase if the cost of building and land increases. The issue is too many people are trying to purchase or rent too few homes, pushing rent or mortgages through the roof. Our population is bigger than our housing stock, and there are too few regulations allowing homes to sit empty and under regulated second home ownership.

I bought a house, was paying it off and then was disabled in my Government job. Did anyone bail me out? Fuck no. Lost the house and am stuck renting. Why should my taxes (yes I pay taxes) bail you out because you are now getting a bit of bad luck?

I agree with you.

But I don't think people asking for it are wanting to make money on their house, I think they want to just be able to keep it.

Who mentioned 1 million quid ? There’s a very good reason why inheritance taxes seen as being on touchable and that is for precisely this reason. If people cannot pay off their houses and leave something to their children in the UK, they won’t bother working. Why would you?

The reason why austerity was so popular in the UK was because most people are cunts, and they were absolutely appalled that some people were better off not working. So they did something about it and voted for possibly the most cruel government we’ve ever seen. four times.

I only get PIP- the 10% increase is £40 a month, hardly compares to the £250/mo my rent has gone up.

Btw, the vast majority of renters are not on any benefits. Shocker I know.

Also, as I have said- the NHS is in a state, my kids school is falling down, social care is in crisis etc etc.

There are things that tax payers money needs to be spent on more urgently.

Did you not take out income protection insurance along with your mortgage? That was a bit silly of you wasn’t it ?
Are you a net contributor these days?

I speedily read your op and went more by the thread title

I do think it’s ups and downs and that’s how it goes

We bought in 2007 and then there was the crash soon after. I didn’t really spend time thinking about it as we were still in our home even if the value plummeted

No they don’t bail out renters at all. Most of us have had to move to smaller rentals for more money. As in lose our home yet again. I have very little sympathy for home owners maybe having to sell and downsize when I look at the stats for renters forced from their home constantly due to rent rises.

And I heard Ed Davey this morning and thought sod off

There are loads more things that need money

The fact that any rent is been paid by benefits means that it isn’t a level playing field. In terms of the most basic requirements for people shelter, some get it for free and some won’t. If you want some sort of communist Utopia, then I’m afraid we’re all going to need to get it for free.

I voted YABU but I agree that noone should buy housing as a gold brick commodity and houses shouldn't exponentially increase in value. If I was queen of the world I wouldn't bail out mortgage payments to help homeowners, I'd wipe debt. As in the banks have to swallow it.

If house prices crash 40% then 40% of debt gets wiped (only on first homes though, not second homes or buy to lets) and banks should take the brunt this time and mortgage payers have to pay the same monthly payments as they previously have. I say this as a (modest) homeowner with no mortgage debt. Why should the taxpayer bail out banks, yet again, this time through subsidised mortgage payments because of their poor lending choices. As others up thread have said, many people had no choice but to borrow huge amounts to get a suitable property so I don't blame them.

I never said that most working people are on benefits? I said that if a renter is on benefits they get help with rent but a homeowner doesn't. How is that in any way fair?

And homeowners are also having to absorb large mortgage payments, so your argument really doesn't stack up

The problem is not that some homeowners will lose unearned wealth because prices drop back down to what they paid. The problem is that some homeowners will end up in negative equity because prices drop below what they paid.

Negative equity is bad because it’s an incentive for people to declare themselves bankrupt. Some will continue paying their mortgages but will be trapped in their homes and unable to move. It’s bad all round. THAT is what the government bail-outs are designed to prevent. Prices have been so high for so long that millions of people would be in negative equity if prices fall too far.