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!

It’s a million quid for a couple. We’re a couple.

The majority of people have had stagnant wages and falling living standards for years (since a little before the GFC). Not everyone by any means but the majority. The government have managed to 'get away with this' due to rising house prices which makes people feel richer so they go out and spend lots of money in the real economy. Now things have changed. It is inevitable that people will feel poorer and rapidly have their spending power decreased by the combination of factors. Recession, high unemployment are inevitable. If (probably when) the government start QE++ for whatever purpose, we are likely to see hyper inflation and destruction of the currency. In this sense, they are stuck. I am sure that the government and BOE are fully aware of this.
The wealthy retired and ultra wealthy are not untouchable. There has simply been no political will to make them pay their fair share. I'm sure you understand the reasons for this.

Lovely. Let's emulate the likes of Russia where the Government can seize your hard-won and legally owned property. Allow people to move in who have never worked in their live.

I am watching with dread how this issue is going to be addressed.

The figures to bail out defaulting homeowners could get very large indeed.

Letting tens of thousands lose their homes is also not an option. They would need to be housed and putting a family in a hotel would probably cost more than their interest.

Also, as it is now, any government help will be limited to the interest and will result in a charge being put on the property that will be repaid when the house is sold. So ultimately, the taxpayer will not lose this money. Repossession will be the only option where there’s not enough equity to allow for additional charges to be placed on the property - there will need to be some tolerance as distress sales could fetch a lot less.

That's an odd way to look at this particularly as renters can be evicted with only 2 months notice in this country for any reason at all.

You are probably a decent landlord who takes their responsibilities seriously. There are so many stories about terrible landlords; you can't possibly have missed them. There have been a number of threads on the property section about families being given notice and being effectively homeless. Renters are so poorly protected in the UK compared to other countries. Indeed, the are so poorly protected compared to my grandparent's generation when a very large percentage of the population lived in secure council housing and stayed as long as they needed to.

@SamanthaCaine have a look at the journalist Vicky Spratt. I realise you come from this from a very different angle to her but she is doing very worthwhile work imo.

Statistics from the Department for Levelling Up, Housing and Communities' 'English housing survey 2021–22' showed that 4.6 million households (19%)rented privately.

So out of a population of what did we say 66 million, we have 4.6 million households renting privately, presumably the other .9 million out of the 5.5 million are renting from the local authority.

it seems, according to the government website, the vast vast majority of private renters are receiving government support.

Why should everything be the government’s responsibility? When my dad bought his first house he was earning £8 a week and £6 of that 8 went on the mortgage, they slept on a mattress on the floor til they could afford a bed, there was no credit cards to borrow on, nowadays everyone doesn’t want to sacrifice the car, holidays, meals out etc, I struggled when I bought my home, but it was worth it, it’s a home not a money making exercise, get a grip

@Evan456 and they were grateful eh 🙄

We live in a country where house prices are so ridiculous no one can afford to get a leg on the ladder. My Dad's house was a family starter home back in the 70s. A three bed semi with garden. 25,000 it cost. Now you cannot buy one for less then 470k. No one has savings unless rich, family must help so if you don't have a rich helpful family you are likely screwed. Renting is now really difficult too. Having a good job doesn't = having a nice home now in UK. This is why I'm moving to Dubai. I agree with you 100% Houses need to come right down.

I had a google. From the same document I think you quoted from:

Receipt of Housing Benefit

1. 2.24 One in five (20%) private rented households receive Housing Benefit.

Seems to be a relatively small percentage of private renters who receive tax payer support.

Estate agents being paid a percentage of the sale price doesn't help. They do fuck all and demand huge payments. All across the EU too agents take way too much. Should be regulated. A per hour or per job price that is far more reasonable. It would then not be in their interests to try and push prices up, up, up.

Of course but all things being equal, the difference between government assistance and no assistance is a tenant looking for another home.

The two month thing is completely independent of the looming crisis.

20% when it equates to 5.5 million people is not a small amount of money.

Their homes could be turned into council housing and they could rent it at an affordable rent, with a lifelong tenancy with succession to spouse and/or offspring on their death.

Do mortgage owners not pay tax now?

What’s a fucking ridiculous thread! This is capitalism. I learned this after qualifying as a doctor and I’m aware landlords are ‘financially fortunate’ compared to the general population. I am the idiot not them…

No need to hate on people who are smarter than we are. This is the monetary system of the world for the last 100+ years.

The people most hit by this will be those who bought during COVID. If you recall, Rishi encouraged first time buyers to enter the market by getting rid of stamp duty (although I don't think it applied just to first time buyers).

Many took the bait, which they may not have otherwise, and as most do, signed up for a 2 year fixed deal. Fast forward to Liz Truss and she well and truly stiffed everyone by allowing KK to present his catastrophic budget. As you know, interest rates rocketed and rose continually afterwards. Interest rates are likely to have risen anyway and whilst we don't know by how much, the catalyst was the government.

The upshot of this is that those poor buyers would never have been stress tested for a rate rise of this magnitude. It goes way beyond normal behaviour and is the Tories' fault 100%. A first time buyer with a £300k mortgage is alleged to require a £600+ increase when they come off their 2 year fixed deals (according to the news). IMO the government should at least help this group of buyers as a bare minimum.

@786Anonymous786 I don’t think you understand the thread. If all those people you talk about are so smart, why would they need bailing out of their mortgage by the tax payer?

Unearned wealth? I'm a nurse and own 45% of a flat. The rent has gone up along with the mortgage. I have massively improved it while I've been here in the hope of making enough to buy a whole property. If I can't make any money on this place I will be stuck here forever, how am I supposed to pay the rent when I retire on an NHS pension?

Yes, all other things being equal, it may make a difference. What I meant was that the renter still has no security so the possible benefit to them is minuscule. I have already said that a large scale bail out of mortgage holder seems very unlikely. A large scale bail out of landlords with BTL mortgages. I can't see that happening at all, regardless of the fact that it would be absolutely wrong on a moral basis. I think they have been trying to squeeze private landlords out for some time.

Thanks. She looks like a star. Hats off to her.

Don't get me wrong, I fully appreciate that a lot of renter's get it bad. Perhaps I've just been lucky but have rented as a young person and in later life when working away. The really sad thing is that she shouldn't have to do this kind of work as the government should be making sure there are minimum standards and have systems in place to police it.

But as we've discussed, most MPs have shares in the rental industry so have no incentive to reduce their own profits for the good of people.

Correct. However, the claim throughout this thread has been the renters are hard done by. Maybe they are, but there’s a hell of a lot of them receiving a hell of a lot of support.

I haven’t for a moment, suggested that their support should be withdrawn.