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!

If you say so.

Yes, exactly. If people choose to buy a high value item, then it's unrealistic to expect the taxpayer to pick up the shortfall.

Renters, private or social, will never see a profit on their outlay. House owners should do.

I don't think it has been mooted as a possibility, just the LDs spouting off. Neither Tory or Labour will go down this road.

True but if someone defaulted on their car loan the consequences wouldn’t be as bad for them & their families as potentially becoming homeless.
It’s the scale of the problem which makes it at least possible that a Government might intervene to help people in the most dire situations.

Situations change. We nearly lost our house in 2012. Still not recovered from the fallout. Now we're on interest only and it's more than the original repayment. We've not had handouts but how I wish we'd let it get repossessed in 2012. Another couple I met on a pain management course were in the exact same situation at the same time. Lost their house - got a council one. £400/month plus help and started gardening business up again. We're still struggling. So yes..there should be help otherwise they'll have to house millions who will be homeless over high mortgages and living their homes. We all pay in....

*losing their homes

People default on Car Loan’s, and all sorts of unsecured debt left right and centre. Personal first hand experience of a friend who rocked up 20grand worth of debt, including a car. Got an IVA is it? Anyway, needless to say she’s paid back very little of the 20 grand and she still has the car. I wonder who pays for that in the long run?

I don't think it has been mooted as a possibility, just the LDs spouting off. Neither Tory or Labour will go down this road.

Suspect you're right and this is a Lib Dem sound bite to grab attention. Doesn't seem to be supported by Tories or Labour. Too controversial

The loan company she took the loan out with insures themselves against default on the debt. So they're covered. However your friend's credit rating will be trashed and she'll be flagged as a risk going forward which means with no credit or very very expensive credit. She might have a shiny new car but defaulting can impact in all sorts of far reaching ways, especially now the era of easy credit is over. Is she renting or does she have a mortgage? because it will potentially impact her housing situation in the future.

The banks are making huge profits from our homes. They don't actually have the money that they lend us. They just type it on a computer and it is in your bank account. It's not really backed by anything anymore, hence why all trust in the banking system has gone. The interest they charge is called 'usury'. That used to be considered a sin in Christendom. Making money from nothing.

The Building Society was a better fairer system. People in the local community would essentially invest in each other's homes. James Stewart pointed it out perfectly in 'It's a Wonderful Life' when he explained that everyone's investments were tied up in the property of others in the community. There was no usury here.

Do you think no one should rent out all or part of their houses either? That would be "making money off their house." That would be a better alternative to asking the government to bail them out IMHO.

As far as I can see the gov bails out the banks, not the mortgage lenders. People will still lose their homes and the bankers get whopping big bonuses and juicy promotions.

Whatever the banks or government does the poor ordinary working people will always suffer.

That's right and the car will likely be repossessed at some point.
But really we all end up paying for this sort of irresponsible, greedy behaviour which our society has become accustomed to which has been encouraged by bail out after bail out.
Someone does pay when people defaults as someone, somewhere owns the packaged up debt which gets sold and resold.
The shadow banking system is unregulated. Goodness knows how much leverage is going on. The financial crash may start here as defaults rise and rise: https://www.investopedia.com/terms/s/shadow-banking-system.asp#:~:text=The%20shadow%20banking%20system%20consists,restrictions%20as%20traditional%20banks%20are.

It also shows the massive entitlement attitude that has permeated the UK over the last 20 years

This. I moved here 5 years ago from another English speaking country. I am agog at the entitlement I see here. These examples from my workplace:

• "It's not worth my time to work, I will just get benefits"
• "The council will bail me out with a house"
• "Landlords are scum"
• "Just tell them you have mental health issues and you'll be signed off"
• "I'm livid my parents won't look after my kids full time! I've gone NC"
• "The NHS will just have to sort it"

No wonder people expect to be bailed out of their mortgage!

To be fair, some of these are valid.

“The NHS will just have to sort it" - if they’re taxing me to pay for a health service then I expect the health service to sort whatever is necessary. If they aren’t going to sort it then they need to stop taxing me and let me purchase private insurance. It’s not entitlement to expect the service you’ve paid for.

“It's not worth my time to work, I will just get benefits" - unfortunately in a lot of cases people are worse off by working. Minimum wage is very low, childcare costs a fortune, and if you’re on benefits you get free prescriptions and school lunches and all sorts. Again, it’s not entitlement to expect to be able to feed your family and cover your bills.

“Just tell them you have mental health issues and you'll be signed off" - honestly if employers weren’t treating people like shit this wouldn’t happen. It’s not entitlement to expect respectful treatment and decent remuneration at work.

I also don’t think it’s entitlement for people to expect to be able to purchase an average small home and be able to pay the mortgage. They wouldn’t be so overstretched and at risk of losing their home if prices weren’t so insane. I don’t blame the people who stretched more than is reasonable to put a roof over their heads - I blame the government who let it get to the point where they had to stretch that far.

It’s only wealth for someone else who inherits it on your death or if folk sell up and move to a cheaper country. Homes cost people considerably more than the sale price over the course of paying for them but no, home owners need to be responsible for their own debt. We suffered negative equity in the past and it wasn’t great, but when we bought our current home after a decade of renting we borrowed considerably less than we were offered. When interest rates are so low they can only go upwards and I’m sorry ,but many folk have been thoroughly irresponsible in their choices because they “wanted” a home, not because they could necessarily afford it . Frankly I’d sooner the government lowered taxes so life was easier for all and to incentivise work.

Its not supported because it would make the current inflationary situation even worse.The country is currently being economically eviscerated by the high inflation environment, and prolonging that environment for even longer (years) would cripple the UK economy for decades.The mortgage folks on here seem utterly oblivious to how much damage the economy would take if they were subsidised by public money.

What is the prediction for more interest rises? Is it currently 4.5%?

Dunno but my BTL is currently 8.74%. My home is 2.5% fixed for another 5 years.

Actually its more like 6% now, 4.5% was back in like March

not everyone would need a surgeon so by that logic the binman should be better paid as everyone will need the binman

It’s the scale of the problem which makes it at least possible that a Government might intervene to help people in the most dire situations

No dice

As soon as the printy printy machine starts whirring then the pound will be shat on again. That will make the situation worse for everybody.

Those in the most dire situations could take in a lodger, extend their term, sell things or buy a cheaper house.

Doesn’t BoE say int rates will be 2% by 2024?

Brilliant answer and if the landlords hadn't bought up the surplus housing and driven up the cost of local housing amd started charging massive rents there would have been enough for everyone. Them saying if landlords sell their portfolio "where's everyone gonna live" is a joke.....if they sold their housing stock the market would be a wash with surplus houses and the prices would come down.

No, they want inflation to be 2%

@LeonardCohensRaincoat they aren’t predicting interest rates to be low again for a long time- because it’s the end of a 15 years period on ‘emergency’ rates after the financial crisis. This period is just a normalisation of an experiment that has lasted far too long & has poured petrol on a housing boom.
To put it very simplistically-
Cheap rates = better monthly affordability = housing boom.
High rates= more expensive monthly payments & less affordability = housing crash

Obviously add in a lot of other issues but that’s essentially what has happened and now people are screaming because they can’t afford their house anymore.