Am I Being Unreasonable To Feel Seething Resentment Towards Those Who Profited From The House Price Bubble

[Son of Taeper]

On the op, I guess no more so than if someone picked up the last "on offer" deal at the local supermarket.

I was in a shop a while back and spotted what I thought was a good deal.

I happened to be exactly 1p short.

Bad luck me, someone had to win.

And then you try to find a parking spot sometime and all the spots are taken.

Bad luck me, someone had to win.

Or you try to get a job and someone else gets it.

Bad luck me, someone had to win.

Profiting from any bubble goes on day by day, but as long as it works in our favor we seem to forget about the unfairness.

[campervanman]

mod edit offensive quote removed

You missed out spivs and crooks who before the 1980's could only find employment as dodgy bookmakers but now call themselves finance excecutives and bankers.

[flatnose]

Bit of a straw man argument there...and as such adds nothing to your case.

[winkie]

People used to trust banks and the advise they gave.....many no longer do, there must be a reason for this.

[KingBingo]

Bit of a straw man argument there...and as such adds nothing to your case.

Obviously....so obviously....it was a parody of his strawman argument. Read the quote.

[thombleached]

Bit of a straw man argument there...and as such adds nothing to your case.

Never heard of satire?

[flatnose]

Never heard of satire?

Nooooooooooooooooo never!

[Buccaneer]

What do you do for a living out of interest?

I've worked in finance for over 15 years, and you have no clue what your talking about.

The finance industry may well be heavily regulated. There may be reams of paperwork. There may be many hurdles on the path to compliance. The question is whether all of this is effective.

Based on observations over the past decade the most credible conclusion is a resounding no.

[KingBingo]

The finance industry may well be heavily regulated. There may be reams of paperwork. There may be many hurdles on the path to compliance. The question is whether all of this is effective.

Based on observations over the past decade the most credible conclusion is a resounding no.

Of course its not effective. Regulation never works, only a free market works and we don't have one of those.

The point of regulation is to create jobs, and make politicians feel important.

[Frank Hovis]

The finance industry may well be heavily regulated. There may be reams of paperwork. There may be many hurdles on the path to compliance. The question is whether all of this is effective.

Based on observations over the past decade the most credible conclusion is a resounding no.

Whne the rules on capital ratios were dropped to be replaced by self-justified risk assessments the genie was out of the bottle and the debt crisis began. So no, not effective because it meant they could do what they liked as regards lending as long as they filled in all the right forms.

[thombleached]

Nooooooooooooooooo never!

No need to be sarcastic dear.

[campervanman]

Of course its not effective. Regulation never works, only a free market works and we don't have one of those.

The point of regulation is to create jobs, and make politicians feel important.

No it isn't. It is to prevent those who can just because they can doing what they can regardless of the effect of their actions on the wider society.

To summarise your position:

The creation of 125% mortgages, liar loans and high income multiple loans had nothing to do with the deregulation of the mortgage industry that occurred in the 1980's?

Yes/no?

Edited April 15, 2012 by campervanman

[DeepLurker]

Just checked that thread again, seems to have been taken over by a nut who has gone from fractional reserve banking to conspiracy surrounding 911.

A pity, they were just starting to figure a couple of things out, now the whole thread just looks nuts.

It will take years and years for the average joe to have a clue about anything, I just can't afford to wait that long.

I've just speed-read the MN thread and I was just thinking that it had been very effectively deep-sixed by Redshield and the other pseudo-nutters *

* I say pseudo-nutters because the way they move from very reasonable posts about excessive debt etc... and on to looney-tune 9/11 conspiracies is just... too smooth.

[SHERWICK]

Regulation never works, only a free market works

Depends what you mean by 'works' exactly?

[Greg Bowman]

Of course its not effective. Regulation never works, only a free market works and we don't have one of those.

The point of regulation is to create jobs, and make politicians feel important.

I presume you drive. So tomorrow you get up and depending on your free spirit you choose which side of the road to drive on as you say an unregulated market.

Now and this might be a stretch for you extrapolate those potential results to:

The tax system

The Law

Paying for your groceries

See civilisation requires a framework these days we call it regulation and granted it can be heavy handed but in truth without it we are on an express train back to the dark ages.

Free marketers and communists live in the same world complete and utter fantasy.

[Venger]

In 2006 we bought a (modest) property on a 100% mortgage. ~ the unshakeable faith of our families and society that property ownership was the way to go, and the increasing pressure at the time to get on the ladder or miss out, that was the decision we made. ~ I'm still in touch with our ex-neighbour. She bought seven years earlier than us, sold at £120k profit after 10 years (this is not London!)

Looking at it again, even more sure my suspicions are correct.

They were willing to buy her inflated house for around £200,000 with an interest only mortgage in 2006. Maybe even £250,000-£275,000. Dirty Labour's tax-credits to help them with paying it.

Only now the HPI has stopped to they look at how much it had gone up in just a few short years. They got what they wanted. They took the debt to buy infront of others who weren't willing to pay the price they were willing to.

[rantnrave]

The poster called Redshield on that thread offers a textbook example of how not to communicate ideas discussed on HPC.

Thankfully, YellowWellies later on counters that and shows how HPC points of view can be put across meaningfully at the right pitch and quickly win over converts.

[dances with sheeple]

Sea change of opinion right across society.

People realise how screwed they are by HPI now.

Back in the height of the boom I lost count of how many friends or colleagues squeezed themselves to get on the ladder, struggling almost from the first month. No cushion, no pension, no savings, no real way to get the serious extra money they'd need through standard career progression. We're talking people with interest only mortgages, often liar loans, taken on to obtain £250k terraced houses when a (non existent) 70 or 80k home made more sense to their finances. They are effed with a capital F.

The OP on the Mumsnet thread is just a pretty normal middle-of-the-road woman. If there hadn't been the unchecked boom they would have paid half the price for their home, hubby could start saving for a pension, and they could live well enough within their means.

We too have older friends able to buy pre-boom and they didn't stretch themselves in the bizarre way people did at its height. Middle earners that paid £75-120 for a home in the mid-late 90s now with tiny mortgages less than a young person pays to rent a room in a student-digsy BTL slum, less than half a working couple pay to rent dank 2-bed flats, sometimes with a kid or two crammed in too.

HPI has ruined society, utterly trashed it, killed it, buggered it, raped the corpse.

if the working-class homes that were selling for £50-£60 in the late 90s and now on the market for 200-250k were the £80k they should be then pretty much everything would be fixed, or at least a heck of a lot easier.

There can`t be any other outcome than a return to 50k flats though can there? The drag on the economy of a stalled market, and masses of angry priced out youth will force government to actively crash the market, or build cheap starter homes? Some of the recent moves say they are "encouraging" people to pay less rent/sell homes for less?

[worried1]

There can`t be any other outcome than a return to 50k flats though can there? The drag on the economy of a stalled market, and masses of angry priced out youth will force government to actively crash the market, or build cheap starter homes? Some of the recent moves say they are "encouraging" people to pay less rent/sell homes for less?

That's what should happen, but most of the priced out youth that I come across are keen to play the game and get on the 'ladder' at any cost. Shared ownership, parent-guaranteed mortgages being used to get £20k-earners into £200k flats and they still seem quite happy about it!

[winkie]

That's what should happen, but most of the priced out youth that I come across are keen to play the game and get on the 'ladder' at any cost. Shared ownership, parent-guaranteed mortgages being used to get £20k-earners into £200k flats and they still seem quite happy about it!

I think you will find with many people that the amount of the debt itself could be any figure, £100k £200k or more, their only concern is that they get what they want to be a home owner, and what the amount of the monthly repayments will be....shows just how short sighted some are.

[LiveAndLetBuy]

Of course its not effective. Regulation never works, only a free market works and we don't have one of those.

The point of regulation is to create jobs, and make politicians feel important.

I doubt very much that anything can be free. Especially when it comes to markets. Maybe if you could decentralise the control of the money supply and somehow make it self-regulating. But even that would only be a start.

[libspero]

A very astute mumsnetter. I'd say she has some of us summed up perfectly.

I thought it was meant to be ironic.. a rabid ranting post about rabid ranting posters.

I'm obviously not fully tuned in to the Mumsnet psyche

[tomandlu]

A very astute mumsnetter. I'd say she has some of us summed up perfectly.

Indeed - let's face it, a lot of people, foolishly perhaps, paid too much for a house. Those who, for one reason or another, find that they can continue to manage the mortgage repayments, have made a choice that, although not crippling, will severely limit their options for many years. For those who cannot manage the repayments, they deserve some sympathy and the advice to get out from under the debt asap. They need to sell up, pay off what they can, and hope that the NE is not too big.

SMI and the other props are not helping these people, they are prolonging the agony.

[worried1]

I think you will find with many people that the amount of the debt itself could be any figure, £100k £200k or more, their only concern is that they get what they want to be a home owner, and what the amount of the monthly repayments will be....shows just how short sighted some are.

Exactly. Those who bought at peak with a BOE+1% IO mortgage are actually paying less in real terms than their parents did 20 years earlier.

From what I can tell houses around my way that were selling at £500k at peak were around £60k in 1987. £60k on an 8% mortgage would have meant a £400 monthly IO payment, £500k on a 1.5% mortgage would be £625.

This must seem like a massive bargain, but they have made no provision for actually paying off the 10x joint salary debt itself, and would be dead in the water if the base rate went back to 4%, let alone 8%!

Edited April 16, 2012 by worried1

[fluffy666]

Exactly. Those who bought at peak with a BOE+1% IO mortgage are actually paying less in real terms than their parents did 20 years earlier.

From what I can tell houses around my way that were selling at £500k at peak were around £60k in 1987. £60k on an 8% mortgage would have meant a £400 monthly IO payment, £500k on a 1.5% mortgage would be £625.

This must seem like a massive bargain, but they have made no provision for actually paying off the 10x joint salary debt itself, and would be dead in the water if the base rate went back to 4%, let alone 8%!

There is a bizzare paradox at work here..

When (wage) inflation and interest rates were at 10% and 12%, going for a mortgage at the edge of affordability was a sensible choice.

Now (wage) inflation and interest rates are at 2% and 4%, going for a mortgage at the edge of affordability is inviting debt slavery..

Low IRs invite debt slavery.