[roofer]

Originally Posted by dxb335d

Guys, what happens to poor sods with mortgages and they cant pay em? Will the lenders allow time for the person to get another job? anyone in that situation?

How many overstretched themselves in the first place?

[RCUK]

It was all too easy to get carried away ... when we went to see about a mortgage in 2006 we were offered 5 x our joint salary which is ridiculous to offer anyone!

When i got my first flat in 2000 i struggled to get 4x my single salary.

The banks did bring this on themselves giving people huge sums they knew they couldnt repay.

Do feel sorry for those who overstretched and jumped onto the property ladder last year in the belief that if they didnt now, they never would be able to.

[dxb335d]

But then how does anyone buy a decent house. Say you earn 50k a year, 4x that is 200k... Catn get Sweet FA round my way for that. 2 decent 2bed flat thats it.

[willhollin]

Im alright, government pays for everything, just gotta keep limping about and getting the missus knocked up.

[beemerbird]

Originally Posted by dxb335d

But then how does anyone buy a decent house. Say you earn 50k a year, 4x that is 200k... Catn get Sweet FA round my way for that. 2 decent 2bed flat thats it.

Carlos, it's been like that for years in many parts of the country, it's nothing new. I know people in their twenties who have to move out of the area they grew up in or buy with their friends and share the property in order to remain in the same area.

One of the ways I've been able to end up in a detached house in the area I grew up in is because we've always bought properties that required either total or substantial renovation. It's bloody hard work though, most of which you have to do yourselves in order to save money.

[Dave_3]

Originally Posted by beemerbird

Carlos, it's been like that for years in many parts of the country, it's nothing new.

I agree.

Carl, you've grown up knowing only this ridiculously easy credit environment (get an M3 for almost nothing down and £X00 a month). But even then I know many people who just simply can't afford the house they want when they start out.

It has not always been so easy with credit. I remember the mortgage rates going to >12%. And also the bleak days of the early 80s - "Gis a job !!".

D.

[dxb335d]

My old girl remembers the mortgage going upto 16% in the 90's.

[beemerbird]

Originally Posted by dxb335d

My old girl remembers the mortgage going upto 16% in the 90's.

Was the very early 1990's. We'd moved into our first house in January 1990, a 2 bed mid-terrace after 8 months of a total renovation. The interest rates hit that high. Monthly payment was more than I earned a month, had to sell the Yam FZ750 and have a cheap Ford as transport.

Three years on, all change and interest rates down again and we moved upto a 3 bed semi........ that needed renovating lol.

[NFS]

Originally Posted by dxb335d

But then how does anyone buy a decent house. Say you earn 50k a year, 4x that is 200k... Catn get Sweet FA round my way for that. 2 decent 2bed flat thats it.

I find it interesting that most people who talking about excessive borrowing and 'overstretching' are older.

If you were on the housing ladder 15 years ago, a £300k+ house is probably 'affordable', but only because of the equity you built up on a rising market.

If you bought your first house in the last 5 years you had no choice but to overstretch yourself.

I bought my first place about 8 years ago, so I caught some of the upside. If I'd bought just 3 years later, I'd have struggled to afford my current home.

[FieldingMellish]

Originally Posted by dxb335d

who is too blame..?!
thoughts please.

How about anyone, from the Thatcher/Reagan years onwards, who espoused teh virtues of hyper-deregulated free market economics? How about blaming them?

That system of ultra-selfish capitalism has failed, just as Communisim failed. But you don't hear much about it in our overwhelmingly right-wing press.

A few years ago, anyone who called for more regulation of the markets - whether they were a politician, newspaper columnist, or bloke down the pub - would have been pillioried by the sort of people who are remarkably quiet now.

Why do the tabloid press - mostly owned by massively rich people who pay f**k all tax, and are often foreign nationals - get in such a frenzy about 'dole scroungers' who are getting x hundred quid a week, but seem unable to work up anywhere near teh same anger levels about fat cat bankers who have gambled away our prosperity?

The Tories are on a hiding to nothing, because while they like to criticise the present government (and who doesn't?), they have absolutely no ideas or alternative strategies to offer. And of course it was Thatcherite free market economics which caused the current crisis.

Unfashionable thinking? Yes, but there is no denying it. An ideology - the Milton Friedman, Maggie Thatcher, ALan Greenspan, greed is good style free market economic model - has collapsed, taking a lot of people and businesses and whole economies down with it. Yet the realities are hardly ever mentioned in the popular press or in public discourse.

Where I work, absolutely nobody has mentioned any of this stuff. They simply do not understand it, and that is the biggest worry, in a way. Because if people don;t understand the extent to which one particular set of social/political/economic dogmas has failed, then how can they be expected to avoid those mistakes in the future?

I was an armchair Labour supporter all my politically aware life - starting around the time of the Miners' Strike [look it up, Carl mate!], but when 'New Labour' got into power it was a case of 'meet the new boss, same as the old boss...parting on the left is now a parting on the right' etc. If Brown should be criticised and blamed - and he should - he should be criticised for being too right wing, not for being left wing. He should not have been so craven to business and the city, he should have been more, er Labour.

Sorry, here endeth the rant.

[beemerbird]

Originally Posted by NFS

I find it interesting that most people who talking about excessive borrowing and 'overstretching' are older.

If you were on the housing ladder 15 years ago, a £300k+ house is probably 'affordable', but only because of the equity you built up on a rising market.

If you bought your first house in the last 5 years you had no choice but to overstretch yourself.

I bought my first place about 8 years ago, so I caught some of the upside. If I'd bought just 3 years later, I'd have struggled to afford my current home.

I could also say 'wish I'd bought my first house 4 years before I did etc' and yes, many did benefit from the build up in equity over the last 15+ years, sure you would have happily done the same. Traditionally, it's always been expected to make some profit on property in the UK, admittedly not on the scale it has been in the recent past. My equity was down to hard bloody graft unlike some who just 'sat back' and rubbed their hands etc.

Personally, I feel those of us who entered the housing market when we did were all new to this expose of credit as we'd traditionally been brought up (certainly I was) in an environment of a mortgage is the biggest loan you should have - end of. When those interest rates hit 16% it was frightening and anyone with any ounce of common sense imo would only re-mortgage working out that they could afford the monthly repayments should interest rates rise again.

I have for many years felt sorry for those trying to get on the property ladder for the first time and fighting the ever increasing rise in property values. I see my niece and her boyfriend stretched to the limit having bought their first house. The point was that this is nothing new........doesn't make it right but facts are facts.

[SixDegrees]

Well, while its not a direct result of the 'recession' with my employer my job as a contrator is up, I'm on the way out as part of a mass explusion. There's no complusory redundancy and voluntary redundency costs too much* so the best cost cutting idea they could come up with is to boot all the hard-working contractors out while the long-term dead-wood on final-salary pensions just lounge about waiting for retirement to come along (no bitterness here, honest gov)

IT contracting has taken hit especially in the Financial Servies sector, but media, TV and consumer goods seem to be on the up and are recruiting.

* - plus, with voluntary redundancy those with time served and skills get paid to leav and get a new, better job and those they want rid of don't leave as they don't have enough to get a job elsewhere.

Friday there was supposed to be my last day but I haven't been served my termination notice partly becuase we're man down just now and partly because my boss has no desire to let me go and he's holding out until he gets a prob from on-high and has no choice but to let me go.

[dxb335d]

If you dont take voluntary redundency but still get made redundant do you get the money you were offered when offered voluntary.

[mgarvey]

My company works predominantly for the public sector, so haven't had much of an issue with the recession yet - in fact all the Government spending on schools etc is helping us.

We probably will get a problem 18 months or so down the line though, when the Government has to recoup its vast deficit and starts squeezing Local and Central Government. That's why we're focusing our efforts on 'cost down' programmes that allow clients to save money over the coming years.

So right now things are great, but I'm trying to ensure my finances are as secure as possible, and my job performance is as good as I can, so when the proverbial hits the fan I'm in the best position to keep my job and weather the storm.

One good effect of the recession is the low base rates. My mortgage somes out of its fixed interest period this month, and the variable rate deal it drops out to is about 3% less than the fixed rate I was on - saving me about £150 a month. I'll be keeping my payments the same and overpaying my mortgage then!

Also, though my E93 is probably in pretty nasty negative equity right now, the finance deal I bought it through is a base rate tracker, so it is dropping like a stone.

[NFS]

Originally Posted by dxb335d

If you dont take voluntary redundency but still get made redundant do you get the money you were offered when offered voluntary.

No .. not necessarily.

The legal minimum for redundancy payments is pretty low. Anything on top of that is voluntary on behalf of the employer.

Most offer pay in leiu of notice. So if your notice period is 6 months, you get 6 months pay when leaving.

That's taxable, but redundancy payments (up to about £26k I think) are not.

[Porscha!]

From what I can make out and have been told we are the worse hit in Europe overall, anyone else think it's anything to do with our 'relationship' with America?

[dxb335d]

Geeza said to me years ago he had a letter offering him 10k voluntary. He didnt take it. He ended up keeping his job, say he didnt and was still made redundant, woudl he still get the 10k?

[SixDegrees]

Aye, thats if the company has compulsory redundency. Mine doesn't so Voluntary is the only option and the terms are quite favorable... 1 month for every year of service + some I believe!

On the house front I've been OK, made a sizeable chunk (sold for 3x what I paid) on my 1st house which is sitting nicely in my current property. House went up after I bought it nearly 2 years ago so reckon I've lost any increase on that euqity from the past 2 years.

Thing is , here in central Scotalnd, houses have started to go back on the market, more signs up and price jumped a smidge last month. Off-set by the fact that Edinburgh relies heavily on financial services; RBoS and HBoS, so the job market is taking a hit.


Can only watch and see how our delighful Mr's Brown and Darling deal with the matter!

[roofer]

Originally Posted by dxb335d

But then how does anyone buy a decent house. Say you earn 50k a year, 4x that is 200k... Catn get Sweet FA round my way for that. 2 decent 2bed flat thats it.

I had the benefit of seeing the slaughter that the high rates of the early 90's caused. It made me very very cautious. I bought when prices were on the floor, but even then, well below what i could afford, refurbed it and live without a struggle. The banks made it easy to get credit, but people were quick to take it, without thinking long term. Now it might be the bit of Yorkshireman in me, but i;m not in the habit of buying what i can't afford, even if that means i have to wait a little longer.

[Zk1]

The Age old thing of those who least deserve it get it the hardest seems to apply.
In my sector of work I used to have 200+ plus jobs to go through per day only like 20 were applicable if i was really lucky which eventually has gone to 30 a day in which none are applicable. I did get somthing though so thats cool. Again to echo other posts chin up. keep fighting.

[NFS]

Originally Posted by roofer

I had the benefit of seeing the slaughter that the high rates of the early 90's caused. It made me very very cautious. I bought when prices were on the floor, but even then, well below what i could afford, refurbed it and live without a struggle. The banks made it easy to get credit, but people were quick to take it, without thinking long term. Now it might be the bit of Yorkshireman in me, but i;m not in the habit of buying what i can't afford, even if that means i have to wait a little longer.

I entirely agree with you, but I think we also have to remember that people entering the property market more recently have much reduced options.

I took no risks when it came to buying my house. Salary multiple is low and I had lots of equity (at purchase price). But, I still ended up paying about £50k more than I though the house was really worth, because of the rising market.

For those people who bought just a few years after me, there were no options other than overstretching. For a first time buyer it was either overstretch and gamble on a rising market / salary or rent for ever.

[Budgie]

Think positive ...keep going its gonna turn a corner...

Dont let it get to you or niggle you...see the good in everything.