To be so cross at the government

[Hillary17]

I honestly have no idea what we’re going to do next year and it’s now keeping me up at night worrying about our financial situation. We’ve been sensible and cut back as much as possible, got rid of all the luxuries people on here suggest to cut back on but there’s still a massive hole forming in our finances. Ours savings have been wiped by buying our first home and general cost of living over the last six months. We saved for ten years to buy our first home together, worked incredibly hard and sacrificed. It’s hardly a mansion either, your bog standard first house! Currently paying around £750 a month on the mortgage. We fixed for two years due to our jobs being a bit in flux and not sure if we’d need to move - this runs out next year and have just been quoted £1150 for our new price. How can this even be possible?! Where do the banks and government think people are going to find this extra money? We can’t even sell up and rent because there’s a huge crisis in the rental market near us and sales are bombing; we’re absolutely trapped here for god knows how long. We’re not extravagant, just comfortable middle earners who wants a normal life. I know there’s people worse off than us (I’m terrified for them because I can’t even explain the rise in our food shop or household bills) but I’m genuinely starting to think nobody cares about the middle income families. We work really hard, earn a decent amount but still won’t be able to afford to put the heating on this winter. I know I’m going to get bashed for this but I’d expect to at least be able to afford a bloody takeaway on a weekend without being in a state of panic. How is that even a situation in 2022?! I’m just so furious with the government honestly. No point to this post other than to say god help everyone who is a low income earner because if things in the middle are this bleak I dread to think.

I hear you.

I hear you too. It’s awful and just feels so unfair. I think about it all the time.

Where do the banks and government think people are going to find this extra money?

The banks have to increase mortgage rates because they acquire the money to lend to mortgage borrowers at market rates. Look at interest rate swaps, if you’re interested in understanding how it works. They can’t offer artificially cheap rates to borrowers. They’d be out of business within the week.

The U.K. government can’t stop the Federal Reserve from increasing base rates. The rest of the world, including the Bank of England, follow.

It's so difficult, but there really are no guarantees in life unfortunately.

I'm one of the low earners you've mentioned, but I got a bit better paid job and a change of circumstances a year ago and I for a little time, though not extravagant, could have some of the things I spent a long time going without and managed some savings too.
This shit show buggered that right up and I'm back to being cold, eating the cheapest of the cheap and having shit all. And being told I should just get a better job, work harder and cut my cloth accordingly - bloody infuriating.

Though at least now I'm not in as much debt I suppose, small mercies.

It sucks OP, it really does, my only hope is that now this is affecting the middle earners who consider they deserve a decent lifestyle because they work(ed) hard and appear to have more of a voice than those who are poor in general, that something might get done as they won't accept the work harder and budget better bullshit. Even if the only change is less people vote Tory.

That's not me having a go at middle earners btw, I recognise that just about everyone is affected by this, it's just how I see it after years of reading how poor people are poor because they're too lazy not to be, and I realise not everyone feels that way regardless of income.

I hear you - I just looked at the remortgage quotes and it’s totally unaffordable

I truly get your anger but rather than the Government I feel much of this is actually down to the choices made by the public and voters and who then complain about the consequences of their choices.

The 17 million voters chose to vote for Brexit ignoring the advice that it would fuck up the economy which it has done and then complain about it.

The public who largely chose to support the Government Covid lockdown measures, the furlough payments, eat out to help out etc and now complain about the consequences of £450 billion extra debt, high inflation and there being no Government money left for the NHS etc.

The public that largely chooses to support sanctions against Russia and military aid to Ukraine Government but then complain about high energy prices, high inflation and high interest rates.

The voters that knowingly elected the serial liar chancer Boris Johnson as PM in 2019 and then complained that he was a serial liar and had to go.

In a democracy you have to go along with the choices made by the majority except it seems the voters and public are happy to take the upsides of their choices but then complain about the downsides or consequences of their choices.

I agree

Same boat here. Also very angry. Have you noticed everyone seems angry? More road rage. Less politeness. More people generally just simmering for an argument.

Where do the banks and government think people are going to find this extra money?

Where are they meant to get it from? The government gets all its money from us. They locked things down for 2 years with most of our approval and now we have to pay for it. Much of the world is having the exact same issues, so it isn’t brexit. We have an incompetent government, and opposition, and so does most of the world. They mismanaged everything recently and have thought relying on Russia for gas, any gas at all, was a good idea. But even places without any Russia energy connection are having increased interest rates and food prices, NZ is screwed and also are struggling with not enough healthcare stuff. I’m angry alright, and actually a little scared because it seems globally there are no decent leaders.

"How can this even be possible?"

Because mortgage rates can go up and down, and we were at a period where they were historically low. In fact the only real thing they could have done was either pretty much stay at the same level or go up.

The clue is in the name "fix". You fixed your rate for 2 years. You could have fixed for 5 or 10 years if you were concerned about ability to make future payments.

I assume the original mortgage also went through affordability tests/stress testing.

I assume that a lot of other people are either in or will soon be in the same situation. Super tight budgeting is the only real solution.

It's so stressful I guess. I remember noticing the same during covid...

I have to disagree with you about furlough payments. This is not about the rights or wrongs of lockdowns but realistically employees had no choice other than to resign and have no money. They couldn't say I'm coming to work anyway when businesses were closed.

Which government? All of them? Interest rates are up globally. I’m the US it’s over 7 percent . I’m fact of the 105 countries globally that offer mortgages uk is number 82.

the cost of living crisis is also global, it’s not just uk. As is the energy crisis. What did you expect the uk to be different from the rest of the world. We are entering a global recession. It’s everywhere.

Interest rates have been ridiculously low for a very, very long time. Of course they were going to go up in the end. The long term average is 6%. Everyone should have taken this into account when deciding how much they were going to borrow.

It's very easy to blame the government/brexit/horrible people out to get you, but it's just an historical cycle.

I am cross at the government but I also come back to the fact the the population of this country voted for Brexit, voted for the Conservatives, and to a certain extent voted for the situation we are in. And they are not sorry, and they would do it again...so I am cross with the people almost as much as the government.

I hear you op. We are the same. Our mortgage will have near doubled when the second part of it renews next year. And tbh, I don't wanna hear the cries of "they were historically low they were bound to go up you're stupid" because frankly yes, I knew they'd go up. But NOBODY knew they'd go up this much and this fucking quickly. Nobody did. And yes, I expect my mortgage was stress tested but they presumably don't assume that my electric bill would have tripled, my food shop has gone up £££ and literally everything else.

And ive no choice but to pay it. I don't have a better house, I'm not getting anything out of it. I'm literally just throwing money at Santander for the priveledge. There's no point in working any more. I wish I'd been less sensible, had as many children as I wanted and not worked, wouldn't have had to consider childcare, and would have had a lovely big council house (because they were very much available here when my child was born) and someone would be replacing my fucking roof for free. But no, instead I'm working two jobs and paying £££ for a shiter standard of living. It's bollocks.

Out of interest if we were still in the EU right now how would it benefit us? Are they offering help to each other?

And also, house prices have never been so high in comparison to wages. So it's all well and good saying it goes in cycles but this cycle is much more shit. It's easier to pay 6% interest when your mortgage is only twice your wage and not 5 x it!

Yup, the can was kicked down the road in 2008, exacerbated by insane covid shit. Stop staying cross, be fucking angry.

Isn’t the default in the US a 30 year fixed mortgage? So interest rate rises effective prospective buyers at the moment but not existed mortgagors. Different to here where most people are on 2 or 3 year fixed that will roll onto sky high rates.

I suspect you don't live in the SouthEast? Waaayyy back in the late 80's we had a 3.5 x joint, at 98%, interest only, at rates of 9% plus having to pay for an endowment to cover the repayment (it didn't).

Ordinary people are being really screwed over by the Government and it's likely to get worse. If it's possible, have you considered getting a lodger in - if only for a short-term financial assistance. I know it's not what most people are comfortable with, but maybe it's an idea to consider just to 'balance the books' for a while.

I agree. This is the silver lining. I speak as someone whose mortgage would probably increase by £700 in 2024. People unfortunately need to learn the hard way that unless you can afford hundreds of thousands in private cancer treatment, own your house without a mortgage AND have a very comfortable pension as well as passive income AND educate your children privately (and can absorb any increases), you do not in any circumstances vote Tory because it would not be in your Interest and you would be screwing yourself over.

I am constantly amazed how many people don't know this and maybe this would be a wake up call.

Lower cost of imports. A large part of the inflation is because it costs much more to buy from Europe and even many made in Britain goods require European parts.