MSE News: Santander to raise mortgage SVR in blow to borrowers

LiGhTfasT

I just fixed my nationwide mortgage at 3.39% for 5 years after reading a few sites about this news.

By the time this house price crash has finally happened I will be mortgage free lol, what's it been 6 years now?

Thrugelmir

laptop80 wrote: »

It's rare to see such open bitterness outside the housepricecrash.co.uk forum.

You'll find most people on MSE have no interest in HPC. In general I suspect most people would prefer lower house prices. As the benefits given the state of the UK economy and household debt burden would speed up recovery considerably.

ILW

I am one of those people who saw my place drop in value by 25% and rates of 12 and 13%. Many did lose their homes then (early 90s) but surely that is what an open market is all about. I know that if I had got greedy and overcommited myself I would have lost everything.

WibbleSnarf

BobQ wrote: »

I think I agree with virtually all your post except the last sentence. Many people have been swept along by the politicians, media and financial services industry convincing them that buying a house is the thing to do. Some have been more cautious than others and some have sufferred for over committing themselves. But to say that its right that those who overcommitted themselves should suffer by losing their homes is a step too far.

I know people who have been reckless and maybe got their just deserts. But equally I know decent people who just made poor decisions and did not understand the level of risk they were taking on. They were just conned by a system that they did not understand or unlucky but they did not deserve to lose their homes. They may have actively contributed to lots of things but they never intended it.

I'm sorry, I just don't buy that these people deserve to keep their homes (implicitly at the expense of others who chose not to jump aboard the gravy train) because they were 'swept along' by the politicians, media and financial services industry. It's almost a universal truth that buying a house is the biggest financial commitment of one's life. If ever there is a time for a bit of diligence and research, surely the biggest financial commitment of your life is it?

All it takes is a bit of web surfing to understand the historical precedents. Take a look at this graph, for instance, and tell me that someone buying in 2006 could reasonably expect that the upward trend wasn't going to correct itself fairly soon.



Somehow, the public forgot, or chose to forget, about the crash of the 90s and I suspect the reason is that many people naively allow the purchase of a home to become an emotional decision rather than a rational decision. They don't want to believe that the message that they get from the media and elsewhere might not be the whole story as it doesn't fit with their aspiration of buying a swish 5-bed with a double garage that's just that little bit more expensive and better than their friends bought 6 months previously.

The alternative to these reckless (or willfully naive, if you must) individuals losing their homes is that they get to keep them at the expense of the others and that those who decided it was a risky time to buy never get their patience, saving and risk-assessment rewarded.

Everyone knows, and everyone knew, that BoE rates were at historically unprecedented lows (before anyone says, until very recently they generally never used to diverge) and there is only one way for interest rates to go in the long term from a historically unprecedented low. If an increase of 0.5% on someone's mortgage is enough to tip them into being unable to afford the repayments, if they calculated their finances that recklessly, then I'm afraid they only have themselves to blame.

These people won't end up sleeping on the streets as the use of the emotive term 'homeless' implies. They will either end up renting privately or will be socially housed. It will be shattering. It will be sad. But these people added to the problem so in my opinion it's better that they have a period of being shattered and sad than it is for a 20-something to have to live with their parents until their 40s because people got greedy and then got bailed out.

WibbleSnarf

Thrugelmir wrote: »

You'll find most people on MSE have no interest in HPC. In general I suspect most people would prefer lower house prices. As the benefits given the state of the UK economy and household debt burden would speed up recovery considerably.

Sadly I suspect you are probably right but just because people aren't interested in HPC doesn't mean that they shouldn't be. The effects are profound and life-impacting.

Genuine question for you, if you don't mind?

You say that " In general [you] suspect most people would prefer lower house prices." and yet the media still talks of the housing 'ladder', talks about 'gloom' when prices come down, generally phrase things in such a way as to infer, and sometimes outright state, that high and increasing house prices are a good thing. Given that most people would, in your opinion, prefer lower house prices, why do you think that the media is allowed to brainwash the public and create this grotesque ponzi scheme?

WibbleSnarf

ILW wrote: »

I am one of those people who saw my place drop in value by 25% and rates of 12 and 13%. Many did lose their homes then (early 90s) but surely that is what an open market is all about. I know that if I had got greedy and overcommited myself I would have lost everything.

Nice piece of tough love, there.

bigadaj

Lower house prices would be beneficial, just depends how we get there, best guess currently is flat prices for many years. I think a ore telling graph would be multiple of average earnings to house price, as the graph above includes a period where inflation has varied from negative to double figures, and interest rates and pay rises almost the same.

WibbleSnarf

Like this, you mean?

First time buyer average house price to earnings ratio

Thrugelmir

WibbleSnarf wrote: »

Sadly I suspect you are probably right but just because people aren't interested in HPC doesn't mean that they shouldn't be. The effects are profound and life-impacting.

Genuine question for you, if you don't mind?

You say that " In general [you] suspect most people would prefer lower house prices." and yet the media still talks of the housing 'ladder', talks about 'gloom' when prices come down, generally phrase things in such a way as to infer, and sometimes outright state, that high and increasing house prices are a good thing. Given that most people would, in your opinion, prefer lower house prices, why do you think that the media is allowed to brainwash the public and create this grotesque ponzi scheme?

The media are people, like you and I. Being a journalist doesn't mean that people have an understanding of the topics they write about. Much is just rehashed reporting off the news wires.

There's been much good reporting since the crash of 2008 but the programmes (both radio and TV) receive scant coverage. Also plenty of reading material available to.

Perhaps its human nature to remain optimistic until the end.......

WibbleSnarf

Thrugelmir wrote: »

The media are people, like you and I. Being a journalist doesn't mean that people have an understanding of the topics they write about. Much is just rehashed reporting off the news wires.

There's been much good reporting since the crash of 2008 but the programmes (both radio and TV) receive scant coverage. Also plenty of reading material available to.

Amazing, isn't it? The likes of Kirstie Allsopp, with *no* financial qualifications whatsoever were paraded as 'experts'. They invariably owned their own property 'portfolios' (gawd, I hate that word) and had a vested interest in getting the public to inflate the value of their assets. Posters on this forum, quite rightly, aren't allowed to name, for example, mortgage lenders as it could be considered 'advice' and yet Allsopp and her ilk were all over the telly doling out their own unique brand of 'advice' to a public who, in most cases, wanted to believe it. This idea that you could buy a doer-upper, paint the walls magnolia, put down some laminate, put some twigs in vases and walk away with £50k in your back pocket was never going to be sustainable. Some greedy people did just that and cashed in at the expense of others but a bit of healthy skepticism was all that was needed to question the sustainability!

Thrugelmir wrote: »

Perhaps its human nature to remain optimistic until the end.......

I'm very optimistic!