Wednesday, Nov 26, 2008
Oh dear god
Daily Mail: Diary of a Repossession: one couple describes their agony at losing £400,000 house
This couple bought their "luxury" four bedroom house in 1999 for £159,500. In 2006 they MEW to fund the purchase of a BMW Z4 and also enter the BTL business, buying a £110,000 terraced house to rent out. They also rack up £50,000 in credit card debt to fund their lifestyle. By late 2007 they can't pay their bills and put their property on the market for £400,000. Estate agent asks them to drop the price by £20k, but despite this still being more than enough to clear their debts they refuse.
House gets repo'd earlier this year. The amount they owe on the mortgage is now £330,000. House is sold at auction this month for £255,000."We are reeling with anger. We can't believe how uncaring it is to sell the house for such a ridiculously low price."
59 Comments
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1. d'oh said...
Actually, their plight has tugged at my heart so much I am going to send them a cheque for half of my deposit earned by blood sweat and tears since 1999 to help with their negative equity, the rest should be covered by what the government is going to filch from me. Oh ffs...what is wrong with these people...do they have no perspective on what they have done? Do they have no shame?
2. theboltonfury said...
they should both be made to watch a Pete Doherty gig. It's the only punishment that fits such a heinous crime
3. Les_angeles said...
Nearly a 100k profit in 9 years and they call it "a ridiculously low price". What a wonderful world.
4. d'oh said...
A few things stand out. First, the bankruptcy fees of £80,000. If that is correct, it is criminal profiteering by the bank. Second, the guy had been in business; he should know what bankruptcy would mean. Third, sounds like he rushed into buying the business without due diligence. People seem so ready to pay the better part of a million quid for something without investigating what they are getting into. Fourth, when you are in that much trouble why not accept an offer of £380 instead of £400 for the house, when it was quite clear the market was beginning to tank. Are people that stupid? It was a profit of 140% and the chance to clear their debts.
5. theboltonfury said...
Having just read the whole diary, I don't have an ounce of sympathy. Greed got the better of them. They believed they were the sultan and sultaness of Brunei when infact they were just the bank's bitches
The house had appreciated by nearly a 100k in 9 years and she feels this is a slap in the face. What a stupid bint
6. whostolemyendowment said...
The roots of their problems go back to 2006 with Paul apparently over extending himself in business expansion, using loans guaranteed on their 'once £159,500' home, this would appear to be the initial crack.....once the prefect storm hit they were unable to survive.
In 2005 was it such a crime to use your increasing house price as a cash cow...? In a sensible world house prices should have seen a stabilisation, or minor correction - for salaries to catch up. But - that is before we all woke up to the mad hatters tea pary that is reality!!!
A sad tail for those imvolved, and so I do not wish to be scornful - as there but for the grace of God go I.
7. it_is_going_with_a_bang said...
Within 3 months of buying a business they were running it at a loss in 2006?
Credit card debts of £50,000?
Refused to market/sell for £380,000 when the opportunity arose?
Actually I do feel sorry for them. That they 'listened' to Gordon Brown and believed the 'hype'.
8. theboltonfury said...
I can't feel sorry for anyone who writes down in a diary how much they paid for a wooden kitchen to show off their purchase power. It's grossly ostentatious and in such poor taste
why not just say 'our new kitchen'?
9. Mike said...
One of the most greed led stories to date. They were unbelieveably naive and now we too will pick up the bill.
10. phdinbubbles said...
"We're throwing a party to celebrate the completion of our new £20,000 bespoke wooden kitchen and my father's 90th birthday."
Sounds like a cracking party. Hope her father was impressed that she thought more of the kitchen.
My opinion of the silly bint deteriorated as I read further. There are genuine sob stories out there to be found at times like these. These people deserve to be where they're at now.
11. Gotout2006 said...
It's a pity they did not hang on a little longer Pinocchio and Badger would have
paid there Mortgage for them. I think after 13 week's the goverment pay's the mortgage intrest.
12. phdinbubbles said...
boltonfury...
You beat me to commenting on the kitchen there!
13. renting2 said...
They'd be very fast to say how clever they'd been if they'd made a vast profit.
14. Eyes_wide_open said...
January 2007:
"Paul and I are so relieved that we go out for a meal - paid for on a credit card. It's the first time we've been out for months."
February 2007:
"Our credit card debt alone is approaching £50,000 and we are falling behind on those repayments."
Hmmmm... I wonder why that would be?
15. nubbers said...
To be fair, the MEW against the house was to fund a business, even if they were blowing money on a new car and kitchen. That is surly a worthwhile thing to do.
I think their mistake might have been in accepting the asking price of the business. Around the same time, I was toying with buying a business, but every time I dug a bit deeper, the asking prices were always way over the top. In all cases, the owner seemed to be selling a job with long hours and moderate pay, while asking for hundreds of thousands of pounds.
16. pelethar said...
I'm sorry to say I'm hoping to see a lot more of this in 2009. The shock in the last paragraph of the article when she actually finds out how much her house is worth, speaks volumes about the deep state of denial many homeowners are still in about the extent of the price crash which has already occurred, let alone what is still to come. Only when many more of them start to face reality - either because they are forced to, or because they just wake up to what's going on - will things really start to happen.
17. denzil said...
I have some sympathy for these people but that doesn't mask the fact that they have been incredibly stupid.
Like Labour's economic miracle, everything they thought they had gained had actually been generated through
rising house prices and built off the back of "funny money".
It's difficult to figure out when UK society went completely stupid. I do remember the Conservative property bubble well and the whole "loadsamoney" thing. People went crazy back then, buying cars etc of the back of money borrowed against rapidly rising house prices.
As a kid I remember well how my Grandparents talked about putting a bit aside for a "rainy day" and also they had the attitude that if you couldn't save up and buy "it", you didn't have "it", whatever "it" may have been. However, I think they were completely insane as they viewed a weeks holiday in Blackpool as the high-point of the year.
How things have changed over a couple of generations!
18. d'oh said...
nubbers - there was also the BTL, the floors, and the cars. It wasn't just the business...though even that seems like an unwise pruchase...for it to go so badly wrong so quickly smacks of a lack of due diligence...hence no sympathy.
19. Nubbers said...
d'oh, re-reading the article, I see that they had another MEW of 60K before the 350K. A MEW of 60K to get into BTL, and in 2006, that really was dumb. I guess that also reflects the lack of due diligence shown in buying the business for the asking price.
20. nubbers said...
This is going to get duplicated in an hour or two because I forgot to enter my password first time...
d'oh - on re-reading the article, I can see that there was another 60K MEW for the house before the 350K for the business. To do that for BTL in 2006 reflects the lack of due diligence shown in paying the asking price on the business.
21. fjcruiser said...
The guy was earning £65k aged 50 ie 10 years from retirement.Surely you would have been able to save a bit wouldn't you ?. Instead they fancied thenselves as entrepreneurs, they borrow money from their house and the bank to buy a BTL and a business. I think the article does tell the true story. They must have been living beyond their means for a long time, not from just 2006.
They knew the businesss was doomed some time ago. They just thought that by going bankrupt they would get out of the hole easily (after all NU Labour made it easy for bankrupcy, it is only 1 year now instead of 3), and could carry on living the life of riley.
Not only they were rubbish entrepreneurs, they also made bad decisions about selling their house and paid the price for it. I am glad that people like him will never get credit again. These guys are costing the taxpayers masses of money. They should never be allowed to borrow ever again.All this a few years form retirement. Unbelievable!
22. japanese uncle said...
Daredevil and reckless 'investor and businessman' without a hint of proper risk management (buying a business with seemingly no or very lax due diligence, even venturing on BTL), but stupid enough to enjoy the non-existent dividend in advance like ' buying a new BMW Z4 plus a small Rover for our younger son Adam, would suddenly start pretending to be another 'vulnerable' victim of the times.
Incidentally what has become of Sayara Beg, who already seemed to have had enough as at March 2007?
23. phdinbubbles said...
The fact that she didn't remove the bits about the kitchen, cars etc before handing it over to the Mail shows a complete lack of judgement about her behaviour would be viewed by a large number of people. She genuinely believed they were important and special enough to have had these luxuries associated with themselves. And she goes from that to writing about slicing a chicken so thinly. Please. Sob Sob Sob. Give us a break and f*ck off. These people belong in the same category as benefit fraudsters in my book - a sense of entitlement that they should live the way they want to at someone elses expense, whilst simultaneously blaming their situation on someone else.
There's nothing like the Daily Mail to get me worked up in the morning. Better get back to doing some work before my head explodes.
The bloke was a high earner since the age of 27 as well - so where did all that money go then. Tw@ts.
Rant Rant Rant
24. nubbers said...
I'm talking drivel and I can't add up (not for the first time). The second MEW was not for 350K. It does not seem to be stated, so I guess they did p*** it up against a wall.
25. debtfree said...
Do you think the photographer was taking the michael by asking her to pose with the dog AND that hair do of hers ?
26. debtfree said...
Sorry, wrong comments section, should be in the Henley-on-Thames article.
27. Fwiw said...
Fooled by randomness...
28. I Want A House said...
When will people get it that a house is only as valuable as the price the purchaser is willing to pay.
29. mountain goat said...
They were stupid and have paid the price. A heavy price, I believe them when they say they have had a hellish year. I learnt early in my adult life what it is like to be in debt and have avoided it ever since. Hard lesson to learn when it is your life's savings are on the line.
30. Epaminondas said...
18. - the whole diary has been either fabricated, or massively tarted up, for the benefit of DM readers. she isconsistently telling herself stuff that you wouldn't have to in a real diary.
If you look at the "luxury" house it isn't actually a rival to Castle Howard: it's small, bang on the main road and the conservatory is a cheap as chips pvc job, and too big. at first glance i thought the photos were of the house they had had to move in to after things went pear shaped.
31. theboltonfury said...
MG, been there too. It is hell
32. phdinbubbles said...
@mountain goat
I've been in debt and learned the lesson - I also paid off the debt myself.
These people have done neither (and they are approaching retirement age so there's no excuse due to a lack of experience of life). I would have sympathy if they took responsibility for their behaviour and told us of how foolish they'd been. They haven't.
Sorry - in a bad mood!
33. Eternal Sceptic said...
just goes to show how dangerous it can be to believe the hype and follw the herd. With hindsight maybe even they can believe they were incredibly stupid. But unfortunately this will be a tale told repeatedly on a greater or lesser scale. They obviously believed crash gordon and the economy being in safe hands.(Though of late it seems to have a severe palsy that is being blamed on external events-?????)
34. bilko said...
I would laugh if it wasn't for the fact that it's not the bank taking a hit its us, the tax payers. Miracle economy eh?
35. maddison said...
One truism here is that every one knows what and when to buy. But nobody really knows what and when to sell. "Buying is optional but selling is compulsory" Any other ideas for a saying
36. last_days_of_disco said...
I feel a feather for them (a corruption of an Afrikaans saying). They are a brilliant example of what has been wrong with this country. They are the older generation who has stolen my and my children's future while I have been working all hours just to make it by.
They have zero imagination (except when it comes to wooden kitchens) and I hope they get kicked even further down the ladder. They are elitist "business people" with zero real skills who have spent their whole life riding on the backs of people with real skills. Time for a good kicking. What job are all these *managers* going to be given in a downturn where companies are looking for people with hard skills?
We don't have time to retrain them to do something useful. The only thing they know how to do is manipulate themselves up the ladder without contributing anything useful. They will end up washing people's cars and stuff. It will be healing to my soul to see them in their proper place at the bottom where their essential selfishness and hubris put them.
They behaved like landed gentry, except they are doing it on credit. There has been a boom in these zero skills chancers over the last ten years. They are the product of a failing education system and no manufacturing base. They can't even see why they are getting done in, its all so "unfair". They neglect the incredible unfairness of having managers leaching away the lions share of the economy from the few people with real skills. I once had 5 managers managing me producing one product after dot com. This is the same now across the economy. The only solution is to ditch all the worthless "managers" and help them to get into something more productive.
37. last_days_of_disco said...
Sorry feeling a bit unforgiving this morning. ;-)
38. tudorian said...
@36
got to say ldod I agree with you 100%.
39. Collywolly said...
When I was a kid my parents used to say "money doesn't grow on trees". Now it should be "Money doesn't grow on houses".
40. phdinbubbles said...
@last days.36
I can supply the names and addresses of a few managers that would benefit from washing cars...
That is the upside to a downturn - it weeds out the sh!t. Would prefer negative growth every fourth quarter though to achieve this effect though rather than saving it all up for 15 years - it'll be a lot more than the sh!t that get taken out now.
41. Cashisking said...
The only good news is that as Paul did nothing illegal, his bankruptcy has been lifted early. But he'll find getting credit almost impossible'.
!?!?
Haven't these idiots learnt their lesson?
42. Chopper said...
I'm a journalist and I'll swear on a stack of Marlboros that this isn't a genuine diary. In fact I'd bet my salary, which is worth a stack of Marlboros, that The Daily Mail has sent its mongrels, er, hounds out to find a repo horror story. The successful hound offered the stricken couple a cheap meal in return for their story, did a half-hour interview, and wrote it up in this very generic, very reader-friendly form, embedding little shock-horror tidbits about bespoke kitchens to rile up the likes of us.
Nobody writes like this except journalists. Diaries are notoriously dull because they focus on the minutae. This is full of sweeping big-picture stuff, the sort of things you tell a journalists with the grim, resolved clarity of hindsight.
The middle-class papers have decided to pitch this meltdown as a morality play - half sympathetic, half finger-wagging. Lucifer is being played by the banks, and Faust is the credulous middle class. Hence the kitchen bit: oh you poor dear thing, but really, what were you thinking? What's that? You believed what we wrote in every headline since 2005? Good Lord, didn't you realise we were using the phrase "property only ever goes up" ironically?
43. Adarmo said...
They've made an annualised return of 5.35% which is more than any bank account over the same period, how uncaring is that?!
44. 51ck-6-51x said...
What I find the worst is how they complain about the repossession fee. There is no such thing - there are legal fees which are confirmed by the courts. They should have played ball.
They clawed back 93bps per year on their end debt after these fees! They should count their blessings - that is a huge spread for such a transaction. (If they had played ball they'd have got about 490bps - probably about the same as running a tax free savings account on the borrowed money since March 99)
45. theboltonfury said...
bps???
I'm not as clever as you
46. andrew said...
Apologies in advance for being ageist but the thing that strikes me, is that they are of a certain age and still want more and more material satisfaction out of life, what happened to people getting to age 45 or roughly thereabouts and relaxing a bit because they are going to die soon. If you haven't made it by age 40 roughly, face it you never really will, play the lottery like everyone else and give young people a chance.
It all gets a bit silly, 50 year old man, body a wreck but driving a £40k BMW, what is the point ? Just a bit sad like oldies rollerscating in the park.
Sorry, did i miss the point of the whole story ?
47. 51ck-6-51x said...
sorry..
wBanker speak!
bp = basis point = 1/100th of 1%
(490bps = 4.9%)
48. Bertywooster said...
A market correction serves a very important function. It takes money from those who have been stupid and redistributes it to the not so stupid. It's beautiful and simple.
49. Sold In 2007 For £500k said...
I wonder what became of the business partner and other investors?
50. fun 4 now said...
well...andrew
i better get rid of the ipod etc....put on my slippers and lie down...and wait....
good luck 'young people'..
51. Cheekie Charlie said...
@42 Yes Andrew lifes not fair. When your young and beautiful you have nothing, when your old and crinckley you have lots of wealth to splurge! By the way when did your b@lls drop?
52. a saver said...
It's a sad story, even if they did bring in on themselves.
Amazing how many people have this idea that once they own property they have the right to expect it to appreciate rapidly in value -never thinking about an upcoming generation who are having to choose between paying inflated prices or accepting that they are priced out. They still did make a stonking profit on the main house anyway, as others have pointed out.
One thing I would agree with them on though - surely how much you have paid in tax OUGHT to make a big difference to what you get on benefits?
53. last_days_of_disco said...
I am against this idea that older folk are useless. That is stupid wrong and self defeating. There are loads of brilliant older folk who I respect and hope to emulate. This is not about age. This is about people taking out more than they put in and then complaining when it all goes wrong. There are far too many young people who already are sponging and contributing nothing except more corruption to a creaking system. I totally will hire experienced older engineers over young bods because they are often some of the hardest working most useful principled people around.
I don't think that "if you haven't made it by the time you are forty you are junk" is true at all! History is just filled with people who achieved incredible things in their 60s and 70s. Certain professions require that sort of age before you can reach your full potential. I want to work until the day I die. Not because I have to pay for a bunch of losers, because I love working!
54. sold out said...
last days of disco@10.58
agree with your thoughts 100% regarding these 2 and the overal economy.
People like this are the product of our unfair and insane economy over the last 30 years.
Those with real skills and work ethic, do not get anywhere, whilst parasites like these two have been able to flourish.
I have zero emphathy or sympathy for their current plight, but rejoice in the fact that they have finally got their just deserts.
My symphathy is for the plight of millions of hard working people in this country who are going to now suffer, probably for the next 10 to 15 years to pay for their failure, that is the real tragedy in this story.
Does the UK have a viable future? Are the next 10 to 15 years of pain going to be worth it? On a daily basis now i am asking these kind of questions?
How many more bills do i have to pay (as a taxpayer) for the over indulgence of idiots like this?
55. mark wadsworth said...
Ha ha! Good old Daily Mash ... oh God ... it's from The Daily Mail.
56. titaniccaptain said...
Speaking of the mash............
http://www.thedailymash.co.uk/politics/politics-headlines/darling-has-secret-plan-to-keep-buggering-about-200811261420/
Bloody great lol
57. amjidk said...
sorry guys not very good at posting links etc, but check this out http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=458467&in_page_id=57&ct=5
looks like reality is beginning to set in, at last!!
58. gone-to-colombia said...
5 hours behind here in South America, just read this posting.
Clearly a pathetic and greedy couple.
My only hope is that their story and those of the many others like them will become burned into the memory of the nation.
This could become a kind of 'folk memory' in years to come, a warning to all upon the wages of greed and stupidity.
Could it be that a better nation might be born from such a searing experience, did the bubbles of the past give birth to a generation
of prudent and hard working individuals?
The leason must be understood again that wealth is generated by work.
59. letthemfall said...
Hope I die before I get old. Well, when I say old I mean at least 5 years from now. Better make that ten. Actually ... let me think about that.
Like, it's like cool to be young. I mean, Little Britain is, like, really funny - I can recite all the sketches off by heart, isnt it. And I own a really really fast BMW M35 XIIA%%%XXftangftang. (I made that last bit up.)