Be Excellent To Each Other

Yes but that will eventually sort itself out and is, effectively, a separate issue.

I have trouble having too much sympathy for people who stretched themselves to a mortgage at a period of historically record low interest rates and didn't consider that they might, you know, rise a little.

Quite. If you were stretched on an interest only mortgage fixed at 4% ( as someone I knew managed to wrangle ) you're not leaving yourself much leeway when they invariably rise.

I'd argue that the whole credit thing is a major cause of house prices dropping. In a way it's sort of lucky it happened now and not in another years time when prices would have another 20% to fall.

Yes, but this is in direct contradiction to saying, "How are they screwed?"

Anyone buying in the last couple of years without a sizeable deposit is now going to have difficulty. The numbers in my previous example were taken from a friend's actual mortgage repayments.

He was paying 900 pounds for something, and is now paying 1400 pounds for the exact same thing.

Surely you can see that in no possible way is this a good thing for that person... and he is a million miles away from being alone in this situation (which is why banks are no longer allowing 100% mortgages and are all in a tizzy).

a 50% drop in prices will help a lot though!

Currently I'm paying just under £400/month in rents for a decidedly average flat in a beautiful location in a family owned mortgage free country estate. Rents on houses similar to what I hope to buy are around £550 before haggling. 6 months ago I looked at a house I was considering an offer on. It was on at £180k and a 95% mortgage would cost around £1100/month.

This house has been reduced over the last 6 months, and is now on at £130k - a £50k drop. a 90% mortgage would cost around £750/month - so still cheaper to rent.

I'll wait until it's nearer £100k and I've saved up a 20% deposit.

True, but like I say, tricky to sympathise when someone makes the biggest purchase of their life without considering the phrase "Record low interest rates" and what that means for likely future direction.

They probably thought that the government would bail them out when the crunch hit.

I have a certain sympathy. 2007 was looking increasingly bad for a first time buyer, with everyone saying get in now, before prices rise even higher. Anyone talking about a crash were looked upon as being idiots. I very nearly got sucked in myself. It was not wanting to spend over half my wages on a mortgage, and having a nice place to rent that stopped me.

Oh I think the crash was unforseen, but a rise in interest rates from levels that were a record low when interest rates are ALWAYS cyclical, not so difficult to see coming.

Same here andyb. I've been putting off buying since 2000 (when I couldn't afford anything but it probably was a good time to buy) and it's become a progressively less good time year on year ever since.

Frankly I don't think prices are likely to come down to what I'd consider fair or sensible levels anyway, so I'm more looking out for a ruin or a field to build something in now.

We were quite lucky, as when we bought our house (in March) we didn't have a deposit, so could only buy with a 100% mortgage. If we'd left it a few months we wouldn't have been able to do it.

Um, out of interest, can you narrow down "quick sharp" any? I've read as much as I can, and Charl's cousin is a lawyer in the residential lettings/property area, but still, information is good.

Craster, the original fixed shorthold tenancy had 2 months notice to be given. It also came with that notice, dated to expire the same day as the fixed shorthold. So effectively, since then we've been on a month-to-month with no notice required (well, 'til the rent period, ie current month, is over).

Therefore, as I understand it - from the initial hearing, mortgage possession will take up to 28 days, and from then getting an eviction notice will take up to 14 days. When they have that, they can boot us out as they feel like.

So if she doesn't get her act together (and last time she just paid up citing - to paraphrase - 'I'm a fucking idiot who doesn't look at their bank account or read their mail', hence it happening again) we have no more than 5 weeks, presumably significantly less - and it can easily take over a week from saying "want that one" to a letting agent, with credit and reference checks and that. And there are no reasonably priced, reasonably located, reasonably nice lets at all at the moment. Hoorah!

Yeah, I've long since given up hope that anyone not married (or at least in a couple) will ever be able to buy in the southern half of Britain again unless they're super rich, especially as the entire system is biased towards couples anyway.

I hope you got a long fixed rate period!

I just give up.

I don't wish to alarm you, but if your house falls into negative equity you are aware that your lender can demand that you pay back the amount of the mortgage that is in excess of the property value. In full. Immediately. I'm not saying they would do that, but they are not renowned for their altruistic behaviour, particularly at the moment.

I've emailed him to ask.

Nope, unfortunately not. We've got a 2-year tracker which means it's great at the moment as our mortgage payments are coming down almost every month. The problem is in March 2010 when we have to re-mortgage - it could be interesting.

He said:


Sounds like had as pleasant a ride as possible under the circumstances.

I got a 90% mortgage and an unsecured loan worth 14% of the property's worth at the same time, meaning my 'mortgage' was actually 104%. The excess was spent on necessary improvements.

The unsecured loan is over the same time and at the same fixed rate as the mortgage proper, which, at the time, was 6.09% which by the looks of it people would kill for round about now, so whether the equity has moved or not I'm still happy. Even if house prices do slump its not really a problem because I'm not looking to move soon.

What cheers me slightly is that 5 years ago people thought house prices were unaffordable too, but back then my house was 'worth' less than half of what I paid for it. Hopefully in another 5 years what I owe on my mortgage will seem equally insignificant. Hopefully.

Two people in got more money than one person shocker.

There's nothing stopping you from organising a mortgage with a good friend(s). Granted it may be a little trickier in the current climate.

Plus huge tax relief, plus tax credits etc etc. If they just had double the money I'd have some sympathy.



Except sanity of course.

Couples? Parents, I'll give you - but you know there hasn't been a MIRAS for about 10 years, right?

Fucking right. I love my friends to bits. Locking myself into a multiple-decade legal and financial contract with them, though, would be bloody mental. There should be no obligation between friends, and definitely none backed by law.

Apparently the repossession has been adjourned; looks like she's got it sorted again. Be nice if she fucking told us, Charl had to ring the court to find out what went on. Really can't forget about moving again this time...

I own my own place, since mid 2006 ish.

5.17% interest
82% mortgage
5 years fixed

Don't regret it in the slightest, even if house prices are falling.

You've changed since you became a Thursday Game Champion. I don't like it.

In what way?

We used to spend all night talking. Now all you want is sex. Ooogh.