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!

Agree with you. The 'economy' will pull something out of thin air to make sure house prices keep going up.

Not convinced, our economy is pretty based on ever rising prices which isn't really sustainable. I think the jig is up.

@Imnotahoarderreally nope it’s not

I don't agree with helping out people in way too big or way too expensive houses though,that's just greed

So what about pensioners who are house rich but cash poor? There's lots of them.

A lot of the problems now can be traced back to Thatcher sellling off council housing stock and creating a housing ‘market’

Bingo.

Who do they rent from? Is it all state owned? Or are others making money off renters?

Bailing out the property market since 2008 is why we are in such a mess now. I hope its over this time - it certainly looks like it's just not affordable to prop it up anymore, but who knows.
My partner and I are neck deep in property assets. We have one residential and three commercial - but yet we wish for a reset.. Why ? Because simply put the obsession of allowing residential property to be seen as an investment vehicle has sucked the life out of the economy at the expense of people who have very little. It's dreadfully bad for our society and unproductive economically. Residential property should be affordable to all and if anyone should get a bail out during this - it should be renters not people who have already got somewhere to call thier own...

I lost 30k on my first house (sold when the recession hit in 2008)

Just about broke even on my second - sold for more than we paid, but not considering how much the mortgage was. We basically overpaid on interest but broke even on equity.

Third house, we just paid off the mortgage and it’s worth about 150-200k more than when we bought it, so I guess we’d be up if we sold it.

If prices dropped though we would be no worse off and would have an even cheaper house when downsizing.

so easy come, easy go I guess. I would feel differently about cash I’d worked hard for myself though!

@Turnleftturnright as I said earlier in this thred Margaret Thatcher made everybody homeowners to stop them striking and rioting and supporting those who striked. The middle class are not middle class at all by yesteryears standards. It used to be a case if you needed to work for a living, you were working class. These days, plenty of people who wouldn’t last three months without a job Consider themselves to be middle class. If you remove that they might start looking up to see who the problem is rather than looking down. Neither the Labour Party nor the Conservatives would like that outcome.

Honestly do people honestly think it was ‘easy’ for previous generations to live/ survive/ buy etc?
houses were obviously ‘cheap’ comparative to wages compared to today, however many families were single earning and many other goods and commodities were much more expensive comparatively to today, such as clothing food and things we take for granted now like cars and ‘mod cons’. And not forgetting the 15% interest rates which saw many people lose homes, businesses and facing bankruptcy.

@WhiteFire Who do they rent from? Is it all state owned? Or are others making money off renters?

A lot in Europe is state owned with strictly controlled rents and long secure tenancy’s. Basically council housing.

@WhiteFire don't know you'll have to google. My point was it's not abnormal to have countries where renting is more popular.

In this country I strongly believe we do not have a housing crisis. We have an affordability crisis.
I personally, just want a house/home to live in. I do not want to make money on it. I want a safe place, a little garden, that’s it.
I hate greed with a passion. I hate that so many people cannot afford a decent standard of living in places such as Devon & Cornwall, London, and smug gits with their holiday/second homes. Enough. I really do hope the housing bubble bursts.

We just live in a fairly average 3 bed house in the East Midlands, we are certainly not house rich, if we downsized to a 2 bed, the money saved would just be eaten up in fees and moving and the bills wouldn't be much less either. Most older people I know are like us. We are not all living in huge houses you know

It's easier to upsize if prices fall. If my flat rises 20% from £400k to £480k and the next flat I want to buy rises from £550k to £660k, the gap between the flats is £180k as opposed to £150k if prices had remained static.

However if my flat falls 20% to £320k and the next flat falls to £440k, the gap is only £120k.
So I save £60k plus on stamp duty and legal costs which are pegged to price of next flat.

Also nowadays with the gaps being so large between properties, most movers have quite a lot of equity in their properties to even talk about moving in the first place.

If we had cheap, secure council housing again with long tenancies- a lot of people wouldn’t care about buying. It’s just private rentals are like the Wild West.

It’s got to burn down so that we have a chance of rebuilding something decent. Not sure I have faith in Labour to do that either though as brown/Blair made the housing boom worse.

It's dreadfully bad for our society and unproductive economically.

This, this, this. Ageing population, education suffering, nhs crumbling, social care crisis because the only investment has been in house prices.

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.

Well yes, that's why Banks offer mortgages, because they make lots of lovely money from them, they honestly don't give two hoots if you do too.
You get to own a house outright at the end of the loan, that is all that is offered in the mortgage, unless guaranteed profit is mentioned in the small print of the loan ?

It would cost you about five grand in Estate agency fees. Five grand maximum in stamp duty and two grand to move. Are you seriously suggesting the difference between a three bedroom and a two bedroom is £12,000 ? It’s nearly 100 grand here. And we are not far away from you.

If someone is struggling to pay their mortgage why not receive some help but have a charge put on the property so when at some point the property is sold the government can recoup some money,

For those renting who are struggling any help with the rent is lost and benefits the landlord. I am not saying they shouldn’t be helped it is just in the past certainly when Labour were in power they homeowner seemed to be viewed and wealthy and privileged and not deserving of help and if they were in trouble they had brought it on themselves certainly in the 80’s.

We are renters who both work full time. Last week our landlord proposed 65% rent increase or section 21 notice. Can you please tell me how I can access this wonderful scheme you are talking about as we could do with some top up from the government.

@troubg It's dreadfully bad for our society and unproductive economically.

This, this, this. Ageing population, education suffering, nhs crumbling, social care crisis because the only investment has been in house prices

Yes- ALL of this!

A bailout to help people who have done the right thing tried to buy a home ,not claim benefits and put a roof over their kids heads then yes. Renters seem to have some sort of pent up jealously of mortgage holders. When they got their mortgages they followed the rules of how much they could borrow and paid the relevant deposit. (10%in my case) It’s not their fault the worlds gone to shit. If people lose their homes where are they going to be housed? Their credit rating will be piss poor they won’t have a deposit or the credit rating to rent a property and there are no social houses left. What do you purpose?? Perhaps we should all listen to the world economic forum and all ‘own nothing and be happy’! Meanwhile they are a bunch of billionaires pissing on us. No thank you I will own my own home and I will pass it to my kids which the government will get inheritance tax from. (by the way I am working class as are most of my friends who have a mortgage so it’s a nonsense that it’s just middle classes that have mortgages). Stop buying into their propaganda, owning a home is not a luxury it’s something that everyone should have the opportunity to do. If you want people to be poorer then you are part of the problem.

@User16387640 I'm not sure why you have replied to my post? Anecdotally you may not be house rich but lots of older people are 🤷🏻‍♀️

I think the trouble is people were basing their finances on very low interest rates and they were low for so long that people didn’t budget for them going up.
Now it’s biting people in the arse. Mine went from 2.2 % to 4.3 % last October after the disastrous Kwasi Kwartang budget.

But no, the government can’t bail people out on their mortgages.

House prices have gone up a lot in the last 20 years too, it was lower interest rates that pushed prices up and made people afford bigger budgets.

Higher internet rates will lower price’s because otherwise people won’t be able to buy.

I don’t think people will go into negative equity like the late 1980s though, I’m sure no government would let that happen.

Why would we bother moving though our house isn't that big, we didn't need a big house as we only have one child, and it probably is only a bit of difference as our house would be a cash buyer house.