Tonight with Trevor McDonald

ginger_nuts

The first house I bough had been repossessed .It was the only way I could have afforded that house . I lived in it 1 year before I got the phone connected (there was a phone box on the corner if I needed a phone ),3 years before I decorated ,4 years before I replaced the kitchen cupboard doors ( not the whole kitchen ).My furniture was OK but not new .I didn't have a store card or credit card or overdraft.I didnt see it as an investment I seen it as a home
I was paying something like 11% interest (1991 )
But I was living within my means .FTBs now seem to want it all yesterday and the cant wait for it

ginger_nuts

Suzey wrote:

Anyone notice that the girl on last night's prog with £25/week disposable income was sitting on a leather sofa?!

Suze

Yea ,and you cant eat a sofa (not even an interest free one )

gelato_cat

Just remembered something. When asked why she wanted to buy, the girl said "renting is just dead money. I wanted to buy so I could say "oooh, this is mine"".

Firstly, as Martin pointed out, it's not yours, it's the bank's.

Secondly, the silly cow only "owned" part of the house and was still paying "dead money" rent on the other bit!!!

Suze

ginger_nuts wrote:

Yea ,and you cant eat a sofa (not even an interest free one )

mpsavuk

Suzey wrote:

The only thing they're thinking about is how much more their property will be worth in a few years' time because "property prices always go up"...

Suze

Do these type of people think every other property in the UK will stay the same price?

Their hovels can go up £1,000,000 in value for all the good a future price rise will do them!

gelato_cat

I think they do. They seem to forget that even if they do sell for a good profit, they still have to live somewhere. These were the same people who said "yeah but the last property crash was years ago".

The one who was still within her probationary period at work made me laugh too. "My boss knows I've just taken out a mortgage and has assured me that if things aren't working out he'll let me know and not just get rid of me."

I've seen things turn very nasty for people within the workplace in a very short space of time, so if it turns out that they don't want her I'm sure that her boss will have the company's interests in mind and won't give two hoots about her mortgage!!!

Suze

mpsavuk wrote:

Do these type of people think every other property in the UK will stay the same price?

Their hovels can go up £1,000,000 in value for all the good a future price rise will do them!

gelato_cat

I've been reading about how lenders are now moving towards basing loans on affordability rather than multiples, eg if you can afford to pay back £800 a month they'll lend it, even if it means it's spread over 80 years.

Even people on £50k borrowing three times salary can only get £150k which doesn't buy much at the moment.

Suze

noyk wrote:

They had a piece in this programme about it too, though it was quite short. The clip was of a girl walking along the street - her and her boyfriend earned in the region of 60k combined and the voice over said they had been offered up to 5.5 times earnings if i remember correctly!

lightspeed

Suzey wrote:

Firstly, as Martin pointed out, it's not yours, it's the bank's.

So what!, How many people (FTB's or not) do you know who can go out and buy a house outright???

Answer: very few.

My point is that most of us have to start somewhere on the property ladder at some point, otherwise retirement may become very expensive if you are still paying rent. The house may be the banks at first, but over time the scales will turn in your favour. For many, there is NO other choice but to have a mortgage and thats why i think comments like that are petty, despite being true at the begining of the mortgage. You ask your parents and your friends parents who also started off with mortgages but who have now paid it off if it was worth having a mortgage? How many would say no?

I agree that the girl in question appeared to have very little knowledge or undertanding of what she had done or was doing. Her finances indicated that but for now, she is surviving and thats all that matters.

In an ideal world without these sky high/exculating property prices, would you own (via a mortgage) or rent? If you can afford monthly payments why do so many have to be so negative, what will you do if this happens? what will you do if that happens? what will you do aliens come down form mars and take you away and eat you?:rolleyes:

Life is full of risks, why dont people just live their own and stop critising others. If things go pearshaped for them, what does it matter to you? Ah, you can say i told you so! :T

gelato_cat

You're missing my point. The point was, she bought because she wanted something that was "hers". It's not "hers". Apart from the mortgage, she's still paying rent on part of it £130/month rent and £260/month mortgage if I remember correctly).

My parents didn't borrow more than three times their income and overstretch themselves. You're not comparing like with like. Yes, they have now paid it off, but I doubt the people on last night's prog will have paid theirs off within 25 years.

As long as renting is cheaper than mortgage repayments, which for many people it seems to be, then it makes more sense to rent.

Suze

lightspeed wrote:

So what!, How many people (FTB's or not) do you know who can go out and buy a house outright???

Answer: very few.

My point is that most of us have to start somewhere on the property ladder at some point, otherwise retirement may become very expensive if you are still paying rent. The house may be the banks at first, but over time the scales will turn in your favour. For many, there is NO other choice but to have a mortgage and thats why i think comments like that are petty, despite being true at the begining of the mortgage. You ask your parents and your friends parents who also started off with mortgages but who have now paid it off if it was worth having a mortgage? How many would say no?

I agree that the girl in question appeared to have very little knowledge or undertanding of what she had done or was doing. Her finances indicated that but for now, she is surviving and thats all that matters.

In an ideal world without these sky high/exculating property prices, would you own (via a mortgage) or rent? If you can afford monthly payments why do so many have to be so negative, what will you do if this happens? what will you do if that happens? what will you do aliens come down form mars and take you away and eat you?:rolleyes:

Life is full of risks, why dont people just live their own and stop critising others. If things go pearshaped for them, what does it matter to you? Ah, you can say i told you so! :T

BobProperty

garry_s wrote:

God - you are a cheery bunch. If people wish to take out a huge mortgage and live off £25 per week and work part time as a barmaid then that is up to them. It is their free choice. I say - good luck to them. I've worked all my life full time as well as part time and had huge mortgages. It was better than living in a property owned by some whimisical landlord. It is up to that person to decide the standard of life they wish to have. If they need to work but neglect their children then they need to seriously consider whether it is worth such a sacrifice.

Her situation was though that she hadn't budgeted for all the other expenses and hadn't calculated that she would only end up with £25 pw (hence my first post on this thread). Now she has to go and work in the pub to make anything more. Where will she be if interest rates go up?

The more I think about this program the more I am convinced that the biggest single house buying problem the country will face is the IO mortgage. IIRC there was a comment or hint in the program that people will be claiming "mis-selling" of IO mortgages. I think lenders will defend this to the absolute max.
All the indications of credit lending needing to be tightened are starting to show, but, as is often the case with these things, it won't happen until too late and then it will be an over-reaction.

[Deleted User]

I watched this programme with interest last night. The fact is that if house prices keep rising, people at at the bottom of the ladder trying to buy their first home will simply be unable to.

That means the rest of the people on the ladder can't progress. The housing market then stagnates and house prices fall 'cos no one can move.

In many places in the UK paying rent is the SAME expense out of the monthly income as paying a mortgage. THAT'S why people want to own their own home - it means quite simply that they don't buy someone else's home for them.

And why should they?

As a former debt counsellor I believe the problems are more than simply someone taking on a huge mortgage.

Taking on a huge mortgage is perfectly 'do'able' - IF you have the financial discipline to prioritise it over all other spending, the income to support the monthly payments and you ensure it is a REPAYMENT mortgage.

What complicates matters with FTBs, (as was demonstrated on the programme by the lady working 2 jobs) - is that people (mainly FTBs) completely fail to factor in other essential expenses - i.e council tax, utilities, food, travel to work costs etc...

They also fail to have any emergency money put aside.

Another worrying trend is friends buying property together to get round the problem of getting on the ladder. What happens if they fall out? Meet the love of their life and want to move out? One loses their income?

I feel the programme failed to mention another reason for huge mortgage debt - such as all the people who BLINDLY consolidate their debt into 'one easy payment' AGAINST THEIR HOME thus putting their home at risk.

Many of these people too, fail to read the small print or look ahead to the future, and fail to grasp the point that what was a problematic credit card bill or unsecured car loan and which was not risking the roof over their heads, is now additional mortgage which is risking their home if they fail to pay.

Consolidation of other debt against mortgages leads people into a false sense of security, especially as their monthly repayments tend to go down. And they just keep spending.

Sadly, many repossessions are due to circumstances beyond the control of the housebuyer whatever thay have tried to do to prevent the worst happening.

However, many are also due to the lack of understanding of how easy it is to lose your home.