Property unrest from the younger generation

[jamesbrown]

Saw this on London Tonight and visited their forums. Was quite a disturbing first post about f trying to get older people to downsize in order to make way for lower house prices. Though it mightt be of interest. The question is entitlrd Pensioners Crime.
http://www.pricedout.org.uk/Forum/tabid/56/view/topics/forumid/1/Default.aspx

[Papaumau]

Hi James...nice to meet you !

I don't think that "they" want the pensioners to give up their larger homes because they are sitting on empty rooms even if that might be the case, I think that they just want access to more "affordable housing" in sizes that suite the bigger familes. These types of homes are in very short supply because the building sector has been hit very hard by the government cuts.

Anyway, I am sure that many elderly people who are "property rich but cash poor" WOULD be very keen on selling their owned - as opposed to rented - homes if they could get a decent price for them. At the moment they can't, so they don't.

[xetog]

We would love to downsize, but have so far been unable.  We have lived in our lovingly maintained 4 bed home for 45 years, but now the kids have flown, we would like something a bit smaller, on one level and a bit closer to the village.  The house we are looking at is the same age as ours, but in need of some renovation, so one might think a suitable move for us.  However we are unable to get a buyer.  Not only that, but the price we would get for our property is hardly any more than the price being asked for the 2 bed bungalow which is being sold on by heirs.  OK, so we could make an offer, but would need a discount of 20% or more to even make the idea viable and we would need to spend that 20% to make the place livable, so after estate agents fees, moving fees etc, we would be no better off than staying put.  If we could make the move, we would love to sell and make way for younger incomers to have a lovely family home and at the same time use the capital generated to eke out our pensions, but at present we have no hope.

[Hugh]

Untill the banks start giving out 100% loans the problem will remain. First time buyers are paying out more in rent than they would in repayments. Builders have been asked to build more houses but not much point if there are no first time buyers to buy them.

[Papaumau]

Untill the banks start giving out 100% loans the problem will remain. First time buyers are paying out more in rent than they would in repayments. Builders have been asked to build more houses but not much point if there are no first time buyers to buy them.

Xetog.......

Yes, sadly, that is what I just said.

It is a buyers market out there but even the buyers - and especially the first time buyers -  as Hugh says - above - cannot raise the cash to take advantage of this buyers market.

The only ones who CAN raise the cash are the buy-to-rent-mob and they are just parasites.

The whole situation is based on a very weak lending sector in the banks coupled with a very poor recovery in the economy.

Being a political animal I blame the draconian cuts that the Tories have imposed for this condition.

[Thesheriff]

Hugh,

The problem with 100 % { and sometimes more } Mortgages is that the  Mortgagee has no stake in the property - therefore when times get hard it is so easy for them to just up sticks and vanish  - leaving another property with the Bank / Building Society - whereas even if you only have a 5 % stake ie. the deposit you paid - you are less likely to vanish overnight.

The first house we bought required a 20 % deposit in those days and we saved for 7 years before getting married to have a deposit - and our monthly mortgage was £ 12.  3 shillings & 4 pence  per month - my gross wage at the time was only £12. 10 shillings a week - so our mortgage was 25 % of my income - but we managed - but then again in those days it was not essential to have a Large Screen TV / DvD player / Wii Machine / TV in every bedroom / Etc Etc etc. we just made do with the basics until we could afford the luxuries - nowadays it seems everyone has to have everything right now -  today - or they are deprived !!!!!!!

[Rita Postlethwaite]

Hit the nail on the head Sheriff. We were in our thirties before we could afford our own home and how proud we were! We too went without what we couldn`t afford and considered it worth it. Now as soon as they get a "partner" they think that they have a given right to own a house. Time everyone started to live in the real world and not the rose coloured one in their minds. 

[Rita Postlethwaite]

PS We did have a 100% mortgage but never once considered running out of our part of the bargain.

[Papaumau]

While I too don't agree with 100% mortgages,  I don't think that many people would DELIBERATELY make themselves homeless by defaulting on a mortgage agreement. The ones that do are the ones that are forced to do it by poverty.

I resist raising the ugly subject of Maggie Thatcher again but It was her who conned a great number of the British people into thinking that they could afford to keep a mortgage going via her "right to buy" of council houses. Along with the reckless lending that was going on at the time, ( which eventually - BTW - blew up in their faces ), poorer folk that had never had an idea of owning their own homes previously were caught in a trap of debt that they could not service.

We all know what happened to the banks after that !

All that said, I still believe in the desire to own one's own "castle" and if one has a decent and a secure job I see no reason why sensible people cannot buy their own home. Of course this would have to be done with some sensibility attached to it whereby a smallish deposit of some kind would have to be available in order to start the process safely.

[Hugh]

Just because some one vanishes the house is still there and can be resold or rented. Many couples are are paying £500 or more on rent which could be paying off a morgaged but they are unable to save for a deposit as well. Bringing back an 100% morgage for couples in secure jobs is well worth the risk.

[David G]

The problem is, those who vanish have probably bought the property for let's say £100k with a 100% mortgage, the property has dropped in value by 10% leaving the bank (savers) many of whom are pensioners trying to supplement their pensions, with a £10k loss. Multiply this thousands of times over as with the sub prime mortgages in the U.S.and you end up with the financial crisis we now have.
Those who have over borrowed / over mortgaged / overspent are now being bailed out by guess who?... savers who are losing 2-3% on the purchasing power of their savings because of  low interest rates, but due to the fact they still have the capital, they aren't entitled to any benefits or add ons to pensions, heads they lose, tails they don't win.
It's unfortunate if people are unable to save a deposit, but if they can't save a deposit they are the ones who will walk away when times get tough they shouldn't be granted a mortgage.
As for secure jobs, I would imagine anybody who takes on a mortgage thinks their job is secure, if not why are they taking on a long term financial commitment?
 
 
 

[Hugh]

Good reason David but my property and many others have dropped in value by more than 10% because we have no buyers. If you think about it for the first ten years or so you are paying off the interest on the lone. The builders are losing one hell of a lot of money because there are no buyers I am pretty sure they would be happy to lose on some to gain on the many. But still the rent mod are quite happy the way things are and will make a bomb.

[Papaumau]

The problem is, those who vanish have probably bought the property for let's say £100k with a 100% mortgage, the property has dropped in value by 10% leaving the bank (savers) many of whom are pensioners trying to supplement their pensions, with a £10k loss. Multiply this thousands of times over as with the sub prime mortgages in the U.S.and you end up with the financial crisis we now have.
Those who have over borrowed / over mortgaged / overspent are now being bailed out by guess who?... savers who are losing 2-3% on the purchasing power of their savings because of  low interest rates, but due to the fact they still have the capital, they aren't entitled to any benefits or add ons to pensions, heads they lose, tails they don't win.
It's unfortunate if people are unable to save a deposit, but if they can't save a deposit they are the ones who will walk away when times get tough they shouldn't be granted a mortgage.
As for secure jobs, I would imagine anybody who takes on a mortgage thinks their job is secure, if not why are they taking on a long term financial commitment?
 
 

Hi David,

I think it is unfair to blame the people who were caught in the sub-prime trap as they were enticed into that trap by the reckless lending and greed of the bankers that thought that they couldn't lose as they profiteered from the sub-prime market.

They paid for this recklessness via the banking crash but are now back in position after WE bailed them out.

These folks all lost their homes after they defaulted on their mortgages and now we have a developed world that has switched to the buy-to-rent market that has caught many of these poor suckers as they fell.

[David G]

Sub prime trap? PPI trap? mis-sold everything trap? why do people always have to blame others for their decisions particularly when they think there's some money in it? nobody held a gun to their heads (as far as we know) they all had the opportunity to say NO! ignorance is no excuse.
I wouldn't for one minute say banks etc are blameless, far from it, after the Northern Rock debacle when I thought I was going to lose my meagre savings I feel nothing but contempt for them.
As for the poor people enticed into the sub prime trap, no doubt they were kind of people who would have needed a 100% mortgage, and look what the result was, an excellent argument for a minimum 10% deposit to show ability to pay and commitment.
Let's not forget, the banks etc don't have any money, it's all other peoples wages, savings etc deposited with them, and a mortgage isn't a right it's a privilege.
A 10% deposit ensures that if they walk away the first 10% loss will be the purchasers after all they're more than happy to keep all the gain if they are lucky enough to make one, I've never heard of anybody offering to share their gains with savers when their property has doubled or trebled in price.   

[Papaumau]

Yes David I would not attempt to abrogate the people from a share of the blame that contributed to the crash.

That said, I cannot either blame the rather gullible  people that WERE walked down that particular garden path. They were not looking for riches, they were looking for a stable roof over their heads and they were conned into thinking that they could afford such a previously-unattainable kind of security against the elements.

I think to be really fair I would put seventy-percent of the blame for this crash on the banks and the speculators and the poor mugs that thought they could own the roof over their heads can carry the thirty-percent of the blame that is left.