Too many new homes are Shameful Shoeboxes

[I1L2T3]

millions of home owners to loose millions

 

Lose what money?

 

1. You have a low/no mortgage and a lot of equity. You lose nothing - the equity was only there on paper created by a bubble. The equity was never your money to lose. In fact it isn't money at all until it is somehow released. If people think a falling market means they will lose the money then cash in now and don't complain later.

 

2. People who did cash out equity and will find themselves in negative equity. Tough luck. They've been idiots.

 

3. People who bought at the peak, stretching their finances to the limit or perhaps even fabricating their financial status by lying to get a mortgage. Tough luck. They've been idiots.

 

4. Over-leveraged buy to let investors. If their investment becomes less than what they paid. Tough luck. They've been idiots.

 

You see. Either people are losing nothing at all. Or if they are because they over-stretched themselves that is their own fault and they need to be adult about it and face up to their mistakes. You can't go out into the big bad adult world and enter legal contracts for hundreds of thousands of pounds then cry like a child when it all goes wrong.

[tinfoilhat]

1. Agree

 

2. If you were hard up and needed the money tied up in your house for something urgent that seemed perfectly reasonable. Not everyone did it for, in the words of ocean finance, a new car and a holiday.

 

3. Too much in one section there. Those who lied got what they deserved, on that I agree. Those who bought at the top of their means took a gamble but not an unreasonable one. That said if they stay put long enough, certainly considering inflation, any negative equity will even out.

 

4. Seems like you are going out of your way to get a whole lot of property repossessed, and leave mortgages unpaid, which is what got us in this mess in the first place.

[I1L2T3]

1. Agree

 

2. If you were hard up and needed the money tied up in your house for something urgent that seemed perfectly reasonable. Not everyone did it for, in the words of ocean finance, a new car and a holiday.

 

3. Too much in one section there. Those who lied got what they deserved, on that I agree. Those who bought at the top of their means took a gamble but not an unreasonable one. That said if they stay put long enough, certainly considering inflation, any negative equity will even out.

 

4. Seems like you are going out of your way to get a whole lot of property repossessed, and leave mortgages unpaid, which is what got us in this mess in the first place.

 

There will be a lot of repossessions sooner or later because there are so many people who will never repay their debts, admittedly some through no fault of their own. Millions of people are on financial life support:

 

1. interest rates can't stay low for ever

 

2. People can't stay on IO mortgages for ever if they are serious about actually owning property - otherwise they're effectively on long term rental contracts

 

3. Inflation in consistently outstripping wage increases. Utilities, travel, food - everything is increasing in price

 

4. When banks start to fail they will call in debts. Any borrowers the banks have leverage over will be first in the line, e.g. those known to have lied

 

5. Job losses will increase. Jobs growth is weak. We are tipping back into a recession that has potential to become a depression.

 

There is only one out for us all and that is rampant price inflation to erode debt coupled with rampant wage inflation. We'll get the rampant price inflation but in a globalised economy where we compete on cost with billions of workers worldwide we won't get the necessary wage inflation.

 

Wake up. We're screwed.

[Bulgarian]

4. When banks start to fail they will call in debts. Any borrowers the banks have leverage over will be first in the line, e.g. those known to have lied

 

They lent money to people they knew had lied ?

[Bulgarian]

w/c pans lower........all this saves thousands on the build price, fact

 

LOL - you're good, i'll give you that

[I1L2T3]

They lent money to people they knew had lied ?

 

Yep

 

You sound surprised

 

Did no lenders every think, hey we're attracting a disproportionate number of these well paid high rollers on these self-cert mortgages who aren't actually self-employed and who if they were telling the truth about their earnings would be able to get a much better deal with a normal mortgage.

 

Legally the onus is on the applicant not to make a fraudulent application. It is they who commit the criminal offence, not the lenders who in any case had their backsides well covered with T&Cs.

 

Lots of people lied. The self-cert mortgage stats from 2000 onwards are quite staggering.