Nearly one million face mortgage difficulty.

Pobby

wannabe_sybil wrote: »

I have no economic knowledge to contribute but this may be a discussion point - all facts absolutely correct at time of typing. Our house, bought with an interest only mortgage linked to an endowment in 1994, is worth @ £6k more than it was 21 years ago (six thousand pounds. Not a typo).

At the same time the value of the endowment is less than optimistic.

Over ten years ago we started over paying on the mortgage because even an idiot like me can work out that there could be issues.

Out of interest i am wondering where that might be ? Thinking of possibly South Wales, Northern Ireland or possibly somewhere in the North of England.

Jack_Johnson_the_acorn

wannabe_sybil wrote: »

I have no economic knowledge to contribute but this may be a discussion point - all facts absolutely correct at time of typing. Our house, bought with an interest only mortgage linked to an endowment in 1994, is worth @ £6k more than it was 21 years ago (six thousand pounds. Not a typo).

At the same time the value of the endowment is less than optimistic.

Over ten years ago we started over paying on the mortgage because even an idiot like me can work out that there could be issues.

How much was the house purchased for in 1994? and how do you get todays value?

Thrugelmir

Jack_Johnson_the_acorn wrote: »

Well a quick rightmove search in Surrey shows ZERO results for 4 bed detached properties around £365k..... The properties that do show are either retirement scheme properties or delapadated terraces that are not exactly "rural"

Left Surrey when I was 22.

Is a lot more to the tale really. As bought the house from new. When sold it some 16 years later. Searches revealed that it was not only built on the site of old crane factory a fact that we were aware of. But in the mid 1800's it was a chemical/plating works. If you've had any experience of this or something similar such as a brickworks. Then you'll know the hassle it causes. In the end we paid for an indemnity policy to cover demolishing and rebuilding the house along with excavating and replacing the top 30 feet of soil. As the local council had around several thousand sites that it needed to test already and our request would have to join the queue. Expensive business to have testing done. So we cut our losses and sold cheaply. As we were the first residents to encounter the issue seems we were lucky. As further information may well have come to light which has impacted the saleability of the houses. Our plot was on the edge part of which originally had a couple of cottages. So not the main treatment part of the works.

wannabe_sybil

House bought in 1994 for under £60k in W Yorkshire. House at the other end of block of four went for @ £70k and is in much better repair than ours. I'm being a bit vague about figures, but trust me, not exaggerating.

When we bought it was a reasonable road with other, incredibly house proud owner occupiers. We were the scruffy neighbours. Now all other houses in block are owned by same btl landlord who doesn't do repairs. The house next door is empty as he refused to do repairs when the kitchen ceiling fell in so the tenants went elsewhere. The house at the back is empty after being used as a cannabis farm - it was owned by someone who finished hoovering at 7.30am when we moved in. The unadopted road was okay when we moved in, but a massive leak from a main pipe uphill and a delay in sorting now means that it is a hazard. I am the street's Hyacinth Bucket!

Stuff happen. I just think it is worth remembering that no matter what, house price rises are not guaranteed.

Edited to add - our mortgage is still a lot less than we would pay to the local btl landlord in rent

wotsthat

Thrugelmir wrote: »

Left Surrey when I was 22.

Is a lot more to the tale really. As bought the house from new. When sold it some 16 years later. Searches revealed that it was not only built on the site of old crane factory a fact that we were aware of. But in the mid 1800's it was a chemical/plating works. If you've had any experience of this or something similar such as a brickworks. Then you'll know the hassle it causes. In the end we paid for an indemnity policy to cover demolishing and rebuilding the house along with excavating and replacing the top 30 feet of soil. As the local council had around several thousand sites that it needed to test already and our request would have to join the queue. Expensive business to have testing done. So we cut our losses and sold cheaply. As we were the first residents to encounter the issue seems we were lucky. As further information may well have come to light which has impacted the saleability of the houses. Our plot was on the edge part of which originally had a couple of cottages. So not the main treatment part of the works.

..sounds like it couldn't get much worse yet someone on IO for the last 10 years would have trousered £30k despite a GFC during that time period.

The more I hear the more foolish I feel for having a repayment mortgage. Wonder if I've been mis-sold.

wotsthat

wannabe_sybil wrote: »

House bought in 1994 for under £60k in W Yorkshire. House at the other end of block of four went for @ £70k and is in much better repair than ours. I'm being a bit vague about figures, but trust me, not exaggerating.

When we bought it was a reasonable road with other, incredibly house proud owner occupiers. We were the scruffy neighbours. Now all other houses in block are owned by same btl landlord who doesn't do repairs. The house next door is empty as he refused to do repairs when the kitchen ceiling fell in so the tenants went elsewhere. The house at the back is empty after being used as a cannabis farm - it was owned by someone who finished hoovering at 7.30am when we moved in. The unadopted road was okay when we moved in, but a massive leak from a main pipe uphill and a delay in sorting now means that it is a hazard. I am the street's Hyacinth Bucket!

Stuff happen. I just think it is worth remembering that no matter what, house price rises are not guaranteed.

Edited to add - our mortgage is still a lot less than we would pay to the local btl landlord in rent

Even someone on IO paying top price 21 years ago in a downwardly mobile area with a crack den one side, a derelict house next door on an unadapted road that's been washed away is up on the deal. Cheaper than renting for a couple of decades and £6k up.

God knows what situation must have befallen the million householders facing mortgage difficulty because of IO.

BobQ

wotsthat wrote: »

..sounds like it couldn't get much worse yet someone on IO for the last 10 years would have trousered £30k despite a GFC during that time period.

The more I hear the more foolish I feel for having a repayment mortgage. Wonder if I've been mis-sold.

That assumes they have not used the equity growth to fund their 4 holidays a year!

wotsthat

BobQ wrote: »

That assumes they have not used the equity growth to fund their 4 holidays a year!

Of course some muppets will have done so but CML data indicates this wouldn't be a normal state of affairs.

Old mortgages will have plenty of equity and deposit requirements has built in equity up front for newer mortgages. There might be a few sticky IO mortgages pre GFC but the holders will be aware already and they've got 15 or so years to get sorted.

There's no doubt there will be people who won't have any means to repay their IO mortgages and I wouldn't argue otherwise. The sheer scale of the potential problem is being massively overblown as the media attempt to keep the masses entertained.

Conrad

I've been on about overly tight criteria and the impact it has on freezing out would be home owners, indeed I went to the FCA with my MP to voice my concerns but it all came to nought.

katejo

wannabe_sybil wrote: »

I have no economic knowledge to contribute but this may be a discussion point - all facts absolutely correct at time of typing. Our house, bought with an interest only mortgage linked to an endowment in 1994, is worth @ £6k more than it was 21 years ago (six thousand pounds. Not a typo).

At the same time the value of the endowment is less than optimistic.

Over ten years ago we started over paying on the mortgage because even an idiot like me can work out that there could be issues.

As an FTB in 1993, I was determined to have a repayment mortgage not an endowment because I wanted to see the loan go down gradually. I remember particularly an interview with 1 mortgage advisor who tried to bully me into an endowment but I refused.