Tales From Northern Rock

[Bruce Banner]

Yes i think so, or at least for common sense

There are serious problems with renting - somebody else receives about a third of your wages and somebody else owns the house you live in and can impose controls and conditions quite arbitrarily or simply ask you to leave. This isn't a very convenient arrangement, especially if you have a job and family. I'm not sure which bit of this you are having problems understanding.

Please visit the many threads on this site that talk about some of the restrictions and inconveniences commonly experienced with renting; there is a very recent one entitled 'No Pets, No smoking, No DSS' (or something similar)

I don't know anything about Sipson, but if you were to conduct a financial survey (and adjusted to compare like with like), you would find that people who have rented during this entire boom bust cycle are now in a far more precarious situation (on average) than those who owned their homes during the same period.

I'm not having problems understanding anything.

I pay rent and in return I get a house to live in. I sign a contract and have reasonable security of tenure during that period. That seems a pretty fair arrangement to me.

It's a shame you don't know anything about Sipson, for your information, it is scheduled for demolition to make way for a new runway at Heathrow and all home owners are being served with compulsory purchase orders, so much for security.

I'm not interested in renting or buying over entire boom bust cycles, just the current stage of this cycle. I'd rather be renting at the moment and the woman referred to in the OP would not have been in her current dilemma had she rented rather than "bought".

Edit: I've been renting this house for nearly two years, and will probably extend for a third. When I moved in here, the market value was £425,000. It would probably sell for £340,000 maximum today and a lot less in a year or two.

Edited February 21, 2009 by Bruce Banner

[bogbrush]

And yet here you still are, managing 1,124 in only a few months.

I wish people would stop going on about 32" tvs, those are so last year.

My post count reflects the interest I have in intelligent posters contributions, not your envious garbage, mate.

[Cogs]

It's really not that difficult:

Income > Outgoings =

Income = Outgoings =

Income < Outgoings =

factor in the risk of losing your job and there you have it.

Simple!

Proof that if only Dickens had had emoticons he'd be far more popular.

"It was the best of times , it was the worst of times "

In fact, a great many classics would benefit considerably;

"It was a bright cold day in April, and the clocks were striking thirteen "

"It is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a wife. "

[Stars]

I'm not having problems understanding anything.

I pay rent and in return I get a house to live in. I sign a contract and have reasonable security of tenure during that period. That seems a pretty fair arrangement to me.

I didn't say it was unfair, i said it was disadvantageous when compared to owning the house you live in*. Similarly, it may be 'fair' to share a toilet with nineteen other families but it probably isn't particularly convenient or efficient for you to do so.

I'm not interested in renting or buying over entire boom bust cycles, just the current stage of this cycle.

We are talking about the benefits of renting vs owning, aren't we? You don't imagine that we could sensibly discuss and weigh these two options and yet somehow ignore the fact that a largest portion of our surpluses as a community have appeared in modern times in the price of real estate, and that the owners of that real estate collect those surpluses without effort while those renting have a third of their wages removed by said owners in perpetuity? Wouldn't you say that was a benefit of owning real estate - a reason to own it and a reason not to rent?

I'd rather be renting at the moment and the woman referred to in the OP would not have been in her current dilemma had she rented rather than "bought".

That's daft, a little like saying -

"She turned left and got hit by a stuka, she should have turned right like me"

Perhaps true but morally vacuous. It is similar to the garbage people spewed when real estate was rising precipitously and renters were mocked as 'going the wrong way' or lacking balls. It is all nonsense, there is nothing remotely moral or earned about any of these outcomes.

There was nothing moral about people making great wads of cash for sitting in their houses - they didn't earn the money by doing something worthwhile, it simply fell to them because they owned sites that monopolised certain types of productive opportunity. There is no sense in which they created or added to those opportunities, they just sat on them.

There was nothing moral or earned or remotely necessary about people being trapped living with their parents or renting shitty accommodation because the real estate market was booming

There is nothing earned about deciding to buy and then finding that the entire economy has fallen apart, so the debt you are taking on board no longer makes the slightest bit of sense.

There is nothing earned about losing your job and becoming homeless because the real estate market has blown the productive side of the economy apart with costs

One may as well try to moralise about the results of a game of Russian roulette in which everyone is forced to play.

The economy was arranged in order to provide freebies for people who own and deal real estate; the gal got on board what is considered to be the central plank of our civilisation and made a choice that would perhaps afford her some measure of personal liberty, independence and allow a stable platform to be productive; little did she understanding that real estate is being run as a scam in the uk. She is certainly no more stupid than yourself, who seems to be making moral judgments that pivot on the results of an unstable pyramid scheme and suggesting that in response to this abusiveness people should just bite down and be happy living in other people's cupboards.

*It is incidentally unfair to the point of at least partially being outright theft, but that is a separate matter.

[Kevin Gee]

From a purely pragmatic stand point, it makes me wary of ever buying a repo. With this kind of emotion flowing, one could, perhaps, receive a visit from someone with a grudge.

Our first home was a repossession back in 1983. I got some abusive phone calls from the previous owners during the first few weeks, usually on a weekend when they'd had a few

[Bruce Banner]

I didn't say it was unfair, i said it was disadvantageous when compared to owning the house you live in*. Similarly, it may be 'fair' to share a toilet with nineteen other families but it probably isn't particularly convenient or efficient for you to do so.

We are talking about the benefits of renting vs owning, aren't we? You don't imagine that we could sensibly discuss and weigh these two options and yet somehow ignore the fact that a largest portion of our surpluses as a community have appeared in modern times in the price of real estate, and that the owners of that real estate collect those surpluses without effort while those renting have a third of their wages removed by said owners in perpetuity? Wouldn't you say that was a benefit of owning real estate - a reason to own it and a reason not to rent?

That's daft, a little like saying -

"She turned left and got hit by a stuka, she should have turned right like me"

Perhaps true but morally vacuous. It is similar to the garbage people spewed when real estate was rising precipitously and renters were mocked as 'going the wrong way' or lacking balls. It is all nonsense, there is nothing remotely moral or earned about any of these outcomes.

There was nothing moral about people making great wads of cash for sitting in their houses - they didn't earn the money by doing something worthwhile, it simply fell to them because they owned sites that monopolised certain types of productive opportunity. There is no sense in which they created or added to those opportunities, they just sat on them.

There was nothing moral or earned or remotely necessary about people being trapped living with their parents or renting shitty accommodation because the real estate market was booming

There is nothing earned about deciding to buy and then finding that the entire economy has fallen apart, so the debt you are taking on board no longer makes the slightest bit of sense.

There is nothing earned about losing your job and becoming homeless because the real estate market has blown the productive side of the economy apart with costs

One may as well try to moralise about the results of a game of Russian roulette in which everyone is forced to play.

The economy was arranged in order to provide freebies for people who own and deal real estate; the gal got on board what is considered to be the central plank of our civilisation and made a choice that would perhaps afford her some measure of personal liberty, independence and allow a stable platform to be productive; little did she understanding that real estate is being run as a scam in the uk. She is certainly no more stupid than yourself, who seems to be making moral judgments that pivot on the results of an unstable pyramid scheme and suggesting that in response to this abusiveness people should just bite down and be happy living in other people's cupboards.

*It is incidentally unfair to the point of at least partially being outright theft, but that is a separate matter.

What a load of old pompous twaddle! Are you one of Gordon Brown's script writers?

Let's put it simply - I choose to rent at the moment because I think it makes financial sense, fact, end of.

[clubberdude]

These people got themselves into this mess no one put a gun to their head

HOWEVER

The banks are total sh**s full stop. They sit there getting the tax payer to bail out their toxic debt whilst sitting and screwing the tax payer chasing them for every penny.

The law needs to be changed and whatever the banks get for a repo they get and not a penny more.

Jingle mail in this country is what is needed and let the banks go and jump

The bank should have assessed the risk to offer the mortgage in the first place. With the banks its heads we win tails you lose, barking mad mentality.

AND

When people wake up to what is going on there are going to be a shed load of riots and civil unrest.

When people are living in a bedsit with 100K worth of debt they can't pay back pursued by a bank, who'm they are bailing out with taxes ,whilst also bailing out the people on benefit street and immigrant avenue, its a tinder box waiting to ignite.

The 70s will look like a holiday.. If its a warm summer watch the news because there will be plenty to occupy the riot police

The nice thing is it is looking like it will be quite a nice summer this year - it could be quite a warm one, so should be interesting...

[billfunk]

What a load of old pompous twaddle! Are you one of Gordon Brown's script writers?

Let's put it simply - I choose to rent at the moment because I think it makes financial sense, fact, end of.

I can't see how it's pompous twaddle although I can understand why, given the present situation, you would rather rent than buy.

Everyone I know would prefer to own their own home. There is something wrong with the country when so many people are obsessed with making money from non-productive assets.

[Saberu]

Sad story, but very common.

Here was my reply in that thread, I think I echo the sentiments of HPC nicely and succintly-

"Banks are scum, your life is worth more than any amount of money. Just declare bankruptcy and start from fresh.

You have been the victim of a giant financial fraud orchestrated by the government through lax banking regulations so you shouldn't feel guilty about your debt, just wipe it clean. Don't worry about the moral hazard of declaring bankruptcy as it is a drop in the ocean compared to how the banks have screwed over our economy through leveraged instruments known as derivatives which are now reversing their leverage from insane profits to insane losses and the taxpayer will be picking up the bill for that, whilst the profits were privately syphoned off to the rich elite investors."

[happy_renting]

I'm not going to post anything on the MSE thread - she may be genuinely suicidal - but I am certainly going to make a few adverse comments about this woman here.

OK, maybe... just maybe, she was not at fault getting into her financial mess in the first place. We don't know the full story.

She goes on to the MSE looking for advice and sympathy.

She is looking at ways to escape the debt, rather than spend years paying it off. Bankruptcy, for example.

In other words, she hopes to avoid paying off some of her debts.

Who will pick up the tab? Northern Rock; i.e, the government; i.e., the taxpayer; i.e. you and me.

The result of her conduct, and others like her, will be higher taxes. Extra taxes that will inevitably put some other, 'innocent' people into financial difficulties because of the additional financial burden.

Does she express the slightest bit of concern about this? Nope.

So not only has she got into a mess, and wants sympathy, she cares b****r all about the hardship she may in turn cause to anyone beyond her immediate family.

It's unfortunate if she has got herself into a financial mess, but I cannot sympathise with someone who now wants to walk away from some of her debts and doesn't give a damn about ultimately dumping them on me.

Perhaps I should ask her for a few hugs.

[Kate's Bush]

can i plus one that? good. i would rather my tax bail out the parents of lots and lots of kids who never gloated at anyone than large banks who have already taken the profits and ran.

Why?

Because they had kids they couldn't afford? (They are v expensive, you know)

Along with a house/mortgage they couldn't afford.

And, no doubt, a plethora of consumables, they couldn't really afford, except a 'nice bloke' let them have a bit of magic plastic.

We need banks, only good banks granted, but we cannot function without them.

But these need to be properly regulated and transparent in how they function, which is very difficult if, as GB insists, they are best placed in the commercial sector. The two do not fit hand in glove.

What should happen is a package of very short term payment freezes, to allow them to stay in the house, mortgage duration extension, to reduce payments over the medium term, with an annual review to assess the situation in favour of the bank to see if it's viable to return to the original terms.

There is no point in turfing these people out on the streets, the costs to the tax payer will be much much greater in the long run.

But they must be made to pay for thier mistakes, or they will not learn, 'bailing them out' would be an absolute disaster they would carry on piling up debt.

[Venger]

What should happen is a package of very short term payment freezes, to allow them to stay in the house, mortgage duration extension, to reduce payments over the medium term, with an annual review to assess the situation in favour of the bank to see if it's viable to return to the original terms.

There is no point in turfing these people out on the streets, the costs to the tax payer will be much much greater in the long run.

But they must be made to pay for thier mistakes, or they will not learn, 'bailing them out' would be an absolute disaster they would carry on piling up debt.

Perhaps for the most worthy causes but you can't do that for near everyone.

It sounds like a prescription for dragging out the longest crash and keeping the economy in a depression for decades.

A house on the road my father bought at my age are up for £300K to £310K. Last one sold in October 2007 at £345K. I'm sure in 2001 they were selling at the £110K-£125K range.

So if you want to protect and rescue near enough everyone, including all those who took on stupid risks, I'll have to continue to rent. It would be best for the economy to allow the good money to come in.

I doubt the current cradle to grave welfare system you calculate will cost taxpayers more, looking after all the people like this woman can survive anyway, and it will have to change to something like the US system.

[bogbrush]

She is looking at ways to escape the debt, rather than spend years paying it off. Bankruptcy, for example.

In other words, she hopes to avoid paying off some of her debts.

Who will pick up the tab? Northern Rock; i.e, the government; i.e., the taxpayer; i.e. you and me.

The result of her conduct, and others like her, will be higher taxes. Extra taxes that will inevitably put some other, 'innocent' people into financial difficulties because of the additional financial burden.

Does she express the slightest bit of concern about this? Nope.

So not only has she got into a mess, and wants sympathy, she cares b****r all about the hardship she may in turn cause to anyone beyond her immediate family.

It's unfortunate if she has got herself into a financial mess, but I cannot sympathise with someone who now wants to walk away from some of her debts and doesn't give a damn about ultimately dumping them on me.

Perhaps I should ask her for a few hugs.

Actually, you're wrong. Bankruptcy was put to her, her main concern when I read it seemed to be her Mother being sunk by it all. She appears from the start to be obsessed about how she'll work all her life to pay for this, and blow her Mums savings too.

Let's be fair.

[Frank Hovis]

THANKS. This is a really important point. People in this country are financially illiterate and yet they have been handed hundreds of thousands to meet a government agenda of 'owning a home' to 'become middle class'. It wasn't their life they were living it was the governments nanny state aspirations to a uniformly boring and bland, xenophobic (apart from authorised 'diversity') middle class.

Cheers.

Yes, it's a waste isn't it. Lives unlived through chasing somebody else's dream of property ownership. Then finding that achieving that dream becomes your worst nightmare.

I would suggest that as the majority of posts, or rather posters, on this thread are in some way sympathetic to the MSE lady that it gives the lie to the frequent accusation that HPCers are bitter people who were envious of those who managed to get on the "property ladder".

When in fact we could see it would all end in tears and wanted to warn people not to ruin their lives.

[Kate's Bush]

Perhaps for the most worthy causes but you can't do that for near everyone.

It sounds like a prescription for dragging out the longest crash and keeping the economy in a depression for decades.

A house on the road my father bought at my age are up for £300K to £310K. Last one sold in October 2007 at £345K. I'm sure in 2001 they were selling at the £110K-£125K range.

So if you want to protect and rescue near enough everyone, including all those who took on stupid risks, I'll have to continue to rent. It would be best for the economy to allow the good money to come in.

I doubt the current cradle to grave welfare system you calculate will cost taxpayers more, looking after all the people like this woman can survive anyway, and it will have to change to something like the US system.

The Banks are setting themselves up again. RBS has just announced it will transfer all its toxic debt to a seperate organisation and guess who will end up owning that!!

Realising this debt at the moment is madness, the negative equity is going to be horrendous. But the Banks dont care it means they dont have to manage the situation and they get the oppotunity to hand it off to the tax payer.

They end up in a very nice position ready to capitulate to more intensive legislation and still make a nice profit.

This needs to be stopped now, the people who created this debt need to be shackled to it until their asset (The property) can fulfil its potential and clear the debt.

These people were not contributing to a stable economy anyway, they were spending money they did not have which has led to this mess.

Keeping them tied down for a few years can't be a bad thing and will reduce the ultimate liability placed against the tax payer for thier consumer gluttony and stupidity.

PS. And GBs just announced he's going to ban 100% mortgages. Christ the blokes a financial genius a vertitable wizard!!!!!!

Edited February 22, 2009 by help?

[Kate's Bush]

The Banks are setting themselves up again. RBS has just announced it will transfer all its toxic debt to a seperate organisation and guess who will end up owning that!!

Realising this debt at the moment is madness, the negative equity is going to be horrendous. But the Banks dont care it means they dont have to manage the situation and they get the oppotunity to hand it off to the tax payer.

They end up in a very nice position ready to capitulate to more intensive legislation and still make a nice profit.

This needs to be stopped now, the people who created this debt need to be shackled to it until their asset (The property) can fulfil its potential and clear the debt.

These people were not contributing to a stable economy anyway, they were spending money they did not have which has led to this mess.

Keeping them tied down for a few years can't be a bad thing and will reduce the ultimate liability placed against the tax payer for thier consumer gluttony and stupidity.

PS. And GBs just announced he's going to ban 100% mortgages. Christ the blokes a financial genius a vertitable wizard!!!!!!

[Little Professor]

Proof that if only Dickens had had emoticons he'd be far more popular.

[ingermany]

Nothing personal against the young mum involved, but:

The loan is in hers and her mum's name, and she says mum has "lots of equity in her other house". I think if mum took out a mortgage to buy a second property and can't make the repayments then surely the bank can repo both properties to get their cash back, or mum takes out a top up loan to the max LTV of property no.1.

In the property pyramid scam mum has profited (lots of "equity") at the expense of her daughter (bought over-priced asset). If daughter needs bailing out, why should mum retain the profits from the scam that put her there. You can't have a scam/market that only produces winners.

As has already been said, if we bail out mum-2-homes, then someone else is denied a place to live at a reasonable price.

[Doctor Gloom]

well give her £60k as a gift then. Actions speak louder. BTW where were you when I needed your empathy when I lost £50k on the markets in 2001 ? " Life is a donkey, you just got to ride it " Ronan Keeting

I didn't buy at the peak only to lose everything. Do I win a prize for my smartness?

[bogbrush]

Nothing personal against the young mum involved, but:

The loan is in hers and her mum's name, and she says mum has "lots of equity in her other house". I think if mum took out a mortgage to buy a second property and can't make the repayments then surely the bank can repo both properties to get their cash back, or mum takes out a top up loan to the max LTV of property no.1.

In the property pyramid scam mum has profited (lots of "equity") at the expense of her daughter (bought over-priced asset). If daughter needs bailing out, why should mum retain the profits from the scam that put her there. You can't have a scam/market that only produces winners.

As has already been said, if we bail out mum-2-homes, then someone else is denied a place to live at a reasonable price.

+1

[happy_renting]

Actually, you're wrong. Bankruptcy was put to her, her main concern when I read it seemed to be her Mother being sunk by it all. She appears from the start to be obsessed about how she'll work all her life to pay for this, and blow her Mums savings too.

Let's be fair.

Fair comment. I also note that she explains in a later post that she is bipolar. So I DO feel sorry for her now.

[Ethel]

Today we have a couple of stories lifted from MSE, the tales of woe of people who are caught in a dreadful mess. They got there through ignorance, stupidity or whatever and it's grim for them. Well, we all make our beds and all that and it's probably not a bad idea for them to go on somewhere where perhaps they can be given advice.

Trouble is, why are some really sad b@stards from here filling their day up by going on there and either posting gloating comments on threads otherwise populated by sympathetic/advisory posts, or just lifting the stories to laugh at here? What is missing from their lives that they feel they will seek kinship with other similarly minded people by laughing at anothers misfortune? Perhaps it helps them feel more imortant, or gives them a sense of belonging but it's sad and you should stop.

This is a great forum sometimes for information and insight but it's also it seems a home for the inadequate who want to bolster their confidence by jeering at the folk who are trapped by the economic debacle. I'd just like to observe that those people expose themselves for what they are and aren't mistaken by the genuinely smart or successful for company, but rather as desperate wannabees.

An affordable home?

[bogbrush]

An affordable home?

Nah, more likely a sense of achievement and emotional security.

[Ethel]

Because renting puts you in a vulnerable, dependency situation which is under the control of someone else

Kind of like taking out a mortgage you cannot afford then?