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!

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....

But that just won't happen. They won't house millions.

I broke a tooth at Easter. I've got an NHS dentist. I thought 'they will have to see me'. Well they didn't and haven't. The dentist wouldn't see me, even when I was in agony - because there wasn't a dentist. They've all gone. 101 (or whatever it is) just told me repeatedly go go to my dentist, A&E said they can't deal with dental issues. The GP said it was a dentist issue. Etc. I've got a private dentist now. It's cost me £1700 so far.

Now, that's not the same issue of course as being homeless. But there was nobody to help me, nobody to rescue me. I was definitely of the opinion that the NHS would see me at some point. I was in pain with a broken front tooth but it didn't happen,

The government are not going to 'house millions' who have been unable to pay their mortgages.

The government are making it pretty clear that any kind of blanket bailout is off the table for mortgage holders.

They are going to allow a rebalance this time.

I think not because they want to the right thing though - it's simply being forced by markets saying UK has too much debt from previous bailouts and market support schemes.

It was a exaggeration anyway whoever talked about "millions" of people being unable to pay their mortgage. Thousands maybe, but it wouldn't be millions.

Most homeowners have equity in their homes so do have options. Most people could take steps to help themselves, such as extending the term or moving to interest only payments, or taking a lodger as mentioned above as long as they don't live in a 1 bed flat. In addition, many people are on fixed rates that still have years to run. Some people have savings or could call on family to help them in an emergency. Some people could work more hours if necessary.

The people who couldn't do any of those things are the minority that could ultimately face repossession. The highest year on record for reposssessions was 75,000 in 1991 so that gives some idea that the number wouldn't be in the millions.

"The people who couldn't do any of those things are the minority that could ultimately face repossession. The highest year on record for reposssessions was 75,000 in 1991 so that gives some idea that the number wouldn't be in the millions."

Your absolutely right, the media are building this up to be something it isn't. Yes buying property and paying off your mortgage is going to be much more expensive going forward. Yes small numbers of unfortunate people won't be able to cope and will sell to downsize or rent. No it won't be millions of homeless - it will be very small numbers who really can't adjust lifestyles to accommodate paying the extra cost to keep a home. People will do everything they can to hold on and most will manage just as they have done through every other adjustment period.
Only around a third of residential property is mortgaged and of those only a small number really won't be able to cope. Banks won't want to dealing with taking back peoples homes - they will allow forbearance and add that to the cost of the loan, extending the repayment period, in cases where its necessary. They will of course make extra profit out of the unfortunate during the process.
In the meantime prices will come down to a level where new entrants can afford to enter the market. This is the natural rebalance cycle that they decided to interfere with post 2008 with emergency low rates and QE. That hasn't worked out too well so it's back to the old boom and bust routine im afraid..

At that time, the prevailing sentiment was to stretch yourself. People told me I should future proof my purchase by buying a 3 bedroom house with garden even though we were in our 20s with no kid. As this would save on moving fees in the future. Yes in that sense it does but at the same time you don't need to move just because you have a kid, plenty of people stay in 2 bed flats with babies. I would like to move to a 3 bed flat at some point but if it doesn't financially work out, I wouldn't do it. It's funny how sentiment changes.

Buying a 3 bed house to future proof would have meant a bigger mortgage as well as higher commuting fares while my purchase a 1930s flat in z3 London was small and at that time was below 2017 prices, and a cheaper option than a 3 bed house in a commuter town due to cheaper listed price and lower fares.

Sunak and Hunt have ruled out help for mortgage payers, as they think driving down inflation is more important.

https://inews.co.uk/news/politics/jeremy-hunt-rules-out-help-mortgage-borrowers-backs-hike-interest-rates-2412428

That’ll change in a heart beat if it suits them. Theyve not exactly kept their word over anything ever on any policy

True.

It’s also unlikely the Tories will be in power after next year so it will become somewhat irrelevant what they have to say on the matter. They will be leaving behind a right old mess.

Council tax needs to be looked at. It's grossly unfair at the moment. And they need to start taxing wealth. The 68 year oldsl couples who live in 5 bedroom paid off luxury homes and who (by their age not by any fault of their own) are costing the NHS the most as well as receiving triple lock pensions should also be paying in. It shouldnt all be on younger renters and mortgage payers.

Council tax needs to be looked at. It's grossly unfair at the moment. And they need to start taxing wealth. The 68 year oldsl couples who live in 5 bedroom paid off luxury homes and who (by their age not by any fault of their own) are costing the NHS the most as well as receiving triple lock pensions should also be paying in. It shouldnt all be on younger renters and mortgage payers

OAPs pay income tax just like anyone else:

https://www.gov.uk/tax-national-insurance-after-state-pension-age#:~:text=You%20stop%20paying%20Class%204,allowed%20before%20you%20pay%20tax).

Indeed. The current tax system hammers (mainly) younger people who work for a living while protecting wealth. It needs to be restructured for lots of reasons. Not that The Tories will do it. It remains to be seen if Labour will.

@3BSHKATS wow so much snobbery and judgement.That’s why your getting so many replies.

I dunno. I think the Tories might have to change tack. Otherwise their voter base will all just die off. I was reading an article recently (can't remember where sorry) about the reasons why as people age they're more likely to vote Tory. It's to do with protecting wealth mainly, as the older you are the more wealth you are likely to have acquired (Eg housing wealth, inheritance) but as millennials are aging, they are acquiring less wealth than previous generations, since home ownership is much less affordable in real terms than it was for previous generations, thereby interrupting the historical voting patterns.

Ageist!!! Why should they move out???? I bet you couldn't afford to buy it? 🤔 No of course you can't , but I could bet you could just about afford he house they would down size to, yes? So damned if they stay and damned if they move. #bitter

@Rainyrunway Also you'd want them to sell at what they bought it for of course so they don't make a profit like @Laughingstock1991 thinks in the OP

@rainingsnoring

"Indeed. The current tax system hammers (mainly) younger people who work for a living while protecting wealth. It needs to be restructured for lots of reasons. Not that The Tories will do it. It remains to be seen if Labour will."

+++
I agree with you that the current tax system penalises younger people as well as young families.
Raising taxes through wealth tax rather than income actually has a number of other benefits :

Income tax doesn't take account of your expenditure such as children or supporting elderly or ill health relatives, cost of living or in which part of the UK you live etc. Currently the top 1% of income earners pay 30% of all income tax - the highest on record So there is a major limit on the ability to further raise income taxes by "taxing the rich"
Lastly wealth taxes are a lot harder to hide from than income taxes. The truly wealthy tend to have their own companies in which it is easier to legally reduce income taxes. Whereas assets such as houses, investments etc all have an eventual owner and a value making it harder to disguise.

@FireflyJar don't be ridiculous. It's not agist at all to suggest that the people who have benefited the most and are most able to should also pay in. And no I wouldn't want them to have to sell their homes, but I don't want younger families to have to either. Agism works that way too you realise?

Why does council tax need to be looked at? Those 68 year olds in a five bedroom house are already paying the most and making the fewest demands on local services. Equally, they’re about ten years away from costing the NHS the most. The people costing the NHS the most are the obese.

They might be paying the most but it's likely the same amount as those in a 3 bed house down the road! Why? It's about time they looked at the bandings and updated them.

But for many renters, both working, in lower paid "essential worker" jobs (as defined during lockdowns) that "social contract" ended a generation ago (in most parts of the country). What about their "social contract"? Is that (and your proposed bailout) only valid if you earn above average wages?

You not suggesting a bailout for all the renters whos rents have skyrocketed the last couple years?

No society for you, just plain greed and selfishness.

The overall way in which homes are taxed is totally outdated. People living in 3 million pound properties are paying less than many outside in homes worth a small fraction. A property tax would be fairer and would encourage downsizing. It is to the overall good of society that people should have secure accommodation and not be crowded into boxes, unable to afford families. Penalising the young again and again is morally wrong and has caused a whole host of problems. We need to step away from the selfishness and greed of Neoliberalism introduced by Thatcher and Reagan.
The over 65s make up a huge proportion of healthcare spending. This is not their fault and will happen to nearly all of us who are fortunate enough to see old age. Yes, obesity causes many health problems but this is spread across all age groups and these problems often manifest later in life.

@1dayatatime thank you. I will look at the video later.

Figures on healthcare spending? Almost 20% of children are overweight or obese, their problems will manifest long before they’re 65. In fact increased demands on healthcare start at 50. It’s only when people reach 85 that demand dramatically increases, given that life expectancy is around 81 it’s much less of a problem than you’d lead us to believe.

https://www.gov.uk/government/publications/health-matters-obesity-and-the-food-environment/health-matters-obesity-and-the-food-environment--2

https://www.icaew.com/insights/insights-specials/the-future-of-tax-and-public-spending/more-people-are-living-longer-how-much-will-it-cost

@Blossomtoes I don't think anyone is suggesting we shouldn't be paying for the healthcare needs of older people or that younger people can also sometimes cost a lot of money in healthcare. Just that wealthy older people (and statistically they are FAR more likely to be wealthy than younger people) should also be shouldering more of the costs. Workers, who are already more likely to be living in overcrowded accommodation, whether renting or mortgage holders, shouldn't be the only ones paying. Especially as the older generation, who are likely to have savings are actually often benefitting (again) due to the rise in interest rates. Tax wealth, not just earnings!!

Also here is an extract from one of the links you just posted

"But the finances of the elderly are a cause for concern, too. While many members of the current generation of pensioners own their homes and are in receipt of index-linked defined benefit final salary pensions, future cohorts have less generous pension arrangements that may make them more reliant on the state once they retire. "

Surely another reason to tax the current older generation?