Renters: Angry and Insecure

PasturesNew

leveller2911 wrote: »

Most days I check many of the forums,....and I can't find anyone quite like Hamish.....

Have you tried match.com?

System

I've got an idea.
Why not start new banks that don't ration mortgages, and lend 100% of house cost to people who can't afford a mortgage ? That would solve the housing shortage.
Then the debts of these banks could be packaged and sold to other banks, on the understanding that they weren't allowed to look inside the packages. Then these banks could further sell on the repackaged packages and they would become AAA gold star rock solid investments, even safer than Greek government bonds.

We could perhaps call them "Sub-prime mortgages".
Or is there a snag in this scheme?

carolt

silvercar wrote: »

Because some of them could have, and in retrospect should have, bought a couple of years ago. Then mortgages were available and deposits smaller. They waited and now can't raise the deposit or can't get the mortgage rate they need to now buy. Its made all the more painful that their contemporaries, who did buy, are enjoying very low mortgage rates making it the cheaper option compared to the rent they are now paying. That, together with their deposit savings gaining little interest is a triple penalty. Add that to house prices not falling as much as they would have hoped and that is four reasons why these renters are upset.

Not sure who the renters you refer to could be, but if so their misery must rest on an entirely false memory of recent history.

House prices in 2008 were still high - they'd only been falling for a short time. But interest rates were high and rising as inflation rose. Any of their contemporaries foolish enough to buy then would almost certainly have got a fixed rate - which of course now looks very expensive.

As we both know, the house I nearly bought in 2007 came back on the market in 2009 (not 2008) at a vastly cheaper price, and sold for probably considerably less than that. So if I'd bought in 2008 I would have watched prices fall further very anxiously, as negative equity drew ever closer.

Plus now I'd be worried about rates rising in future - some very sleepless nights.

So given the true facts, I think most renters are extremely relieved they didn't buy in 2008.

1998, say, would have been a good time to buy - and clearly still is, for those with a time machine handy.

But 2008 - no, I don't think so.

silvercar

Not sure who the renters you refer to could be, but if so their misery must rest on an entirely false memory of recent history.

So are there no angry renters around? No-one complaining that they can't now get the mortgage to buy that they could have got a few years ago? No-one saying they could have bought with a 100% mortgage but now they need a 10% deposit to get a reasonable interest rate?

Look on the mortgage board, plenty there struggling to get a mortgage that would have been so easy a while back.

As we both know, the house I nearly bought in 2007 came back on the market in 2009 (not 2008) at a vastly cheaper price, and sold for probably considerably less than that.

I thought we'd done this one. Someone bought it for 275k in 2007 and wrecked it. Its now been cheaply refurbished and now its on for £350k. If it sells for £320k they will probably break even.

So if I'd bought in 2008 I would have watched prices fall further very anxiously, as negative equity drew ever closer.

Given that you would be buying for the long term, why would you be worried about future house prices in the short term. With a fixed rate mortgage , you would be comfortable with your outgoings.

So given the true facts, I think most renters are extremely relieved they didn't buy in 2008.

No because they haven' t seen the great price falls they were hoping for; the mortgage market hasn't eased, so they still need to pay their rent, save a deposit and get little interest on their savings. At the back of their mind they know that that house purchase is a hassle still to come.

Any of their contemporaries foolish enough to buy then would almost certainly have got a fixed rate - which of course now looks very expensive.

Many people are happy with variable rates at little over base rates, I know I am.

carolt

silvercar wrote: »

So are there no angry renters around? No-one complaining that they can't now get the mortgage to buy that they could have got a few years ago? No-one saying they could have bought with a 100% mortgage but now they need a 10% deposit to get a reasonable interest rate?

Look on the mortgage board, plenty there struggling to get a mortgage that would have been so easy a while back.



I thought we'd done this one. Someone bought it for 275k in 2007 and wrecked it. Its now been cheaply refurbished and now its on for £350k. If it sells for £320k they will probably break even.

Re the first part, I suspect the people that can't get a mortgage now but could have done a few years ago are precisely the ones who shouldn't have been given a mortgage a few years ago, and frankly we're doing them a favour by not giving them a mortgage now. They are precisely the ones who would now be in negative equity and stressing loads.

Re the second point, I think that thread disappeared from the front page and I never did get round to responding. Basically, quite possibly the people who bought that house would make a profit if it sold at 320K - but it won't. Or not for several years - are they prepared to wait that long whilst thousands of pounds of cash sits in a slowly rotting, empty 'investment'? Or whilst they pay off the mortgage every month (if they mortgaged it - you'll remember that it was sold as cash buyers only, I'm sure).

The reason it won't sell for that price is because it's vastly overpriced. We nearly bought it just before the peak for 275K - there is absolutely no way that selling prices (NOT asking prices - seling prices) are 17% above PEAK levels. And they've done it out really cheaply and nastily.

It's been on for several months now, for a laughable 350K - nearly 30% above peak prices!!!

Hardly surprising they haven't sold. Lots of other stuff has sold locally, so it's not just a flat market - it's a greedy vendor and an overpriced house.

They'd be very lucky to get what we would have paid for it. But even if they did get that, don't imagine they'd be making loads of money - their mortgage costs are almost certainly larger than my rent, as they wouldn't have been in a position to mortgage it until this year, when as you point out rates were high again.

Or if they'd had loads of cash locked up in an unproductive house (rather than mortgaging it) they'd be kicking themselves given how much the stock market has risen since they bought it.

No - I certainly don't feel sad I didn't buy in 2008. I have a close friend who did, much to my concern - with the generally poor economic climate which you also seem to have conveniently forgotten, she's been incredibly worried about money over the last couple of years.

Not a good situation to be in at all.

silvercar

No - I certainly don't feel sad I didn't buy in 2008. I have a close friend who did, much to my concern - with the generally poor economic climate which you also seem to have conveniently forgotten, she's been incredibly worried about money over the last couple of years.

My initial posting was a general comment, certainly not aimed at you. We've established the reasons why your not buying before 2011, that are nothing to do with house prices. Don't take it personally, it wasn't meant to be directed at you.

Back to "that" house. It was repo'd from the people who bought it for 275k before they'd gone far in refurbing it. So who knows what the new owners paid, undoubtedly for cash. So we won't know, even when it is sold, whether they made a profit or not. It has been "under offer" once and its back on the market at the same price.

I sold in 2006 and bought at the same time. I could have chosen to rent, but then the price of the house I have lived in for the last 4 years probably hasn't changed significantly and I have a mortgage that is BOE + 0.75%, I wouldn't be able to get that now and the equity from the sale of the previous house would have given a very poor return. So for me it was the right thing to buy again straight away. Had I rented I would now be looking at mortgage rates more like 5% and my rent would be more than my mortgage costs.

HAMISH_MCTAVISH

silvercar wrote: »

I sold in 2006 and bought at the same time. I could have chosen to rent, but then the price of the house I have lived in for the last 4 years probably hasn't changed significantly and I have a mortgage that is BOE + 0.75%, I wouldn't be able to get that now and the equity from the sale of the previous house would have given a very poor return. So for me it was the right thing to buy again straight away. Had I rented I would now be looking at mortgage rates more like 5% and my rent would be more than my mortgage costs.

A good point, conveniently ignored by some on here.