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!

No, you're right and that's a shame, however they're not squeezing out private landlords to improve security for tenants. They just want the monopoly.

They're never taking mine out of principle.

The problem is interest.
In most non Western countries people are able to buy properties and land without a loan.

The asset is solely theirs from the beginning.
Hence why the African and Asian economies are developing much faster.

House prices will come down in the UK to ensure that the ultra rich can come in and sweep up vast amount of properties.

The current economic policy is to get rid of the small landlord.

And as we have just seen, many receive no support at all and will, no doubt, also expect to be 'bailed out' and have help with high rental costs if mortgage holders are bailed out. The suggestion that all renters are already being supported is incorrect.

You seem to be very selective in your reading again. Nobody has suggested that all renters are supported. Just that a tremendous number are, therefore what’s good for the goose is good for the gander.

And actually my mortgage payment on both houses combined would be less than the tax payer was paying out in rent so that’s good isn’t it?

I'm in a shared ownership and can't afford the other 3/4 of it right now with how the market has over inflated since we bought it, I'd be happy for the market to crash and lose my equity if it means we can afford to buy the rest of it

Ha, ha. As a decent landlord who seems to understand that they are providing a service for their tenants, I hope you can stay!

I need to read more of what Vicky Spratt has written, an admirable crusade!

House equity, keeps thousands of tradesmen and retailers in business
it’s part of a bigger economic picture!!!
this short sighted narrative is what happens when people can’t see the big picture
house prices are an essential part of Uk economy
Mir may not be ideal but it’s naive to think otherwise

I think a number of people have made comments along the lines of 'renters get help anyway so they don't need the help that we do'.
You seem to have a really strange, entitled attitude. Buy a house because it is best for you but own your choices and take the consequences. That is part of being an adult.

That’s so sad that it comes to that for people

I could say that you have a just plain strange attitude, fancy wanting to see thousands of people pushed down the snake, not passing, go, not collecting £200, and yet at the same time, trying to claim that you have no vested interest, you’re just a casual observer. Very odd.

I made a little money off my first house that paid tax and costs for the second. I made a bit more off the second which paid tax and costs for a same size property in a more expensive town for the growing family. I worked my butt off to improve each property. You need a bit of profit to pay the tax and costs of moving. Blame the government for taxing property to oblivion before you blame individuals for the rise in property prices. The government is invested in raising house prices because they cream a load of money through VAT, stamp duty, second home tax, council tax, capital gains tax.

There was a thread about house prices a while back. Someone posted a really good post about home ownership, and how with interest paid, rate of inflation, etc etc, a house which looks like it has increased £100k in value, may not have done due to other factors. Yes, it may sell for more now than 25 or 50 years ago, but it’s not actually worth any more.

I’ve explained that really badly. I’ve had a quick look for the post but can’t find it. Another mumsnetters will probably be better than me at remembering it.

You could but you wouldn't be able to find me expressing that opinion or wish in a single one of my posts so you would look pretty foolish for making things up.

Just because you put “I think” before the statement doesn’t shield you from owning your opinion on the resulting consequences of people’s opinion of you.

Because they live in the same economic climate as everyone else - borrowing money to buy houses, some on a private basis and some on a business footing. A private owner defaults on a mortgage and is tipped into the rental market. A multi property landlord defaults on their mortgages and many people become homeless and now looking for housing in market where there are fewer houses and more competition

@3BSHKATS To presume, people buy there home, then leave it to their children when they die, it definitely isn’t the deal.Parents are living longer now, that equity in their home is theirs, either for social care costs or to sell up buy something smaller and use the rest of the money for holidays, or to make their life’s easier.Also l don’t understand the grudging outlook, on people who live in social housing.If they fit the criteria what’s the problem.I’m also a home owner, however l don’t expect to be bailed out.When you buy a property you should be ok, with interest rates, as long as you haven’t over stretched yourself.That said, everyone, is going to feel the pinch.

I don’t think you should categorise it as being renters money bailing mortgage holders out, as ultimately it is everyone’s taxes in a combined pot. To be clear I am not saying the government should bail mortgage holders out, just the perception of your statement. It would be no different saying why should working people bail out furloughed people, or people who can’t be arsed to get a job and just rely on the state, because one person has something the other doesn’t (for whatever reason that may be)

@Hanny21

You're right. We shouldn't categorise it like that at all. Given that 65% of homes are owned, this clearly wouldn't be the case.

If the Lib Dems have said they don't agree with mortgage subsidies, do you think they might triple them if they got any sort of grip on power in the future? Remember student fees 2010.....

But public money is used to bail out people on a daily basis though, isn’t it? A vast number of people get housing benefit, disability benefit, income benefits etc etc

If the government were to bail mortgage owners out then it would probably be the only ever time the vast majority have received anything from the state.

Why shouldn’t they receive help? If it means people don’t lose their home, it can only be a good thing. Let’s face it the council house stock is dire. The mortgage situation would also affect landlords…. So it wouldn’t be a bad idea to help people keep their homes!

Maybe I’m being stupid here but wouldn’t stopping the rise of interest rates help solve the problem?
The Bank of England rose rates to combat inflation, but surely making millions of home owners including buy to let landlords struggle to pay, or pass the costs on would have a negative effect?

Additionally, can there be some sort of control on house prices?

The point about bailing out mortgage holders is , unless you own a property out right or live in social housing, the vast majority of the population are effected by mortgage rates. Most people have a mortgage or privately rent. So renters are effected too.
Buts how can mortgage holders be bailed out, when it could be years before interest rates fall? There’s no time limit on it. Plus , how exactly can you set a criteria for this? Everyone’s finances are different.
I can’t see how this would work.

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

Yes it is the governments fault.

The buyers did not need to bother considering the repayments if the interest rates went up. No siree Bob.

Fuck me. Since covid the concept of personal responsibility no longer exists. It is properly worrying.

This is total and complete nonsense.

House prices shot up 20% from 2020 (covid)

What will happen now is that they will go back to that level (20% reduction).

If a mortgage is too expensive for you, I suggest you either:

1. Cut back on your expenses
2. Extend the term to 35 years or more
3. Move to interest only
4. Sell and downsize

If you cannot do those things, then tough luck.

The state does not exist to subsidise your asset in perpetuity.

It never has. And its high time people got this through their rather thick skulls.

When you buy a house the mortgage lender has a responsibility to see you can meet the payments, at the time. Based on your earnings.
Thats it. It’s the buyer’s responsibility to check they can meet the mortgage repayments. If you buy a property when interest rates are at 2%, you have to work out what the cost would be if it went to say 6%.

When I got a mortgage with the Halifax, I think they even quoted what my repayments would if the interest rates were at 10%. Even though at the time rates were rock bottom.

People have been buying properties basing their re payments on low interest rates. The thought of rates being at 5 or 6% didn’t cross their minds.