We Paid £180,000 For Our House

[Harry Monk]

They cannot sell. They cannot move. Nor can they switch to a cheaper mortgage, or protect themselves against future interest rate rises. This is the plight of an estimated two million households – and, as Financial Mail reveals, their situation is set to get worse next year unless action is taken.

(snip)

Michael Winter, 32, and his wife Danielle, 30, bought a new three-bedroom semi in early 2008 for £180,000. The house, near Stanley, County Durham, was marketed at £185,000 and the couple believed they were getting a valuable discount.

They borrowed £135,000 from Halifax and, under schemes common at the time, almost all of the rest of the property’s price was borrowed from Gladedale, the developer. The Winters must repay Gladedale in 2018 – or sooner if they sell – at a rate of 25 per cent of the property’s value.

But with little equity to start, the Winters’ situation worsened rapidly – thanks largely to the subsequent actions of Gladedale. In 2010, the struggling company, which operates a range of housebuilder brands including Bett, Ben Bailey Homes and Country & Metropolitan, slashed the prices of neighbouring properties down to an average of £85,000 – a 53 per cent reduction.

These knock-down prices dealt a bitter blow to Gladedale’s earlier customers, such as the Winters, whose own homes plunged in value accordingly. In June this year a surveyor priced the Winters’ house at only £115,000. This puts them in negative equity to the tune of 43 per cent."

Read more: http://www.dailymail.co.uk/money/mortgageshome/article-2248613/We-paid-180-000-house-priced-115-000-The-million-sell-on.html#ixzz2FDWY4sYD

There doesn't seem to be a great deal of sympathy being expressed for them in the comments section, and I can't find it in my heart to have too much either.

[@contradevian]

Read more: http://www.dailymail...l#ixzz2FDWY4sYD

There doesn't seem to be a great deal of sympathy being expressed for them in the comments section, and I can't find it in my heart to have too much either.

Don't worry Mervo or Carnage will be along shortly with more B(rupt)oE magic beans.

Hear are some `fantasy` Daily Mail headline for your.

Plight Of Millions Of Renters As Greedy Landlords Fail To Pass On Mortgage Interest Savings.

Misery as Council Tenants Face Inflation Busting Rent Increases.

Edited December 16, 2012 by Secure Tenant

[frederico]

Tbh, they were just buying a home to live in as a family, now if they were BTL

The BTLs are the ones to make bankrupt.

[Harry Monk]

The thing I can't understand is that if the developer has slashed the price of neighbouring properties to £85,000, why do these two think theirs is worth as much as £115,000 when theirs would be a second-hand new build and the £85,000 houses will be new new-builds.

[Redcellar]

In a few months the Winters will go on to Halifax’s standard variable rate of 3.99 per cent. This can rise at any time – it last increased in March from 3.5 per cent. Other lenders’ rates have also been rising, and last week the Bank of England said average equivalent rates, the sort typically paid by ‘prisoner borrowers’, had risen to their highest level since 2009.

Consumer group Which? has warned that ‘too little is being done’ and says its research shows ‘many mortgage prisoners have poor deals and are vulnerable to rises in rates’.

Prisoners. Hardly.

And they're only going to pay 3.99 %. God help them all when normal rates resume. The world is truly full of muppets, but why would you have yourself photographed as being two. That's the real question in this article.

[winkie]

When anyone buys something with cash or debt they buy it because they feel it is good value for money and at a price they feel comfortable with and are happy to repay, they buy it for what it can do for them not on how much money it can potentially make them.......most things that are bought lose value for example cars, furniture etc why not homes.....so they will just have to hold onto it for longer and try and pay back the debt faster...pay rent to the bank until they own part of it.....people who rent don't expect a cash lump sum when they leave, so why should other renters.

Edited December 16, 2012 by winkie

[19 year mortgage 8itch]

Worse things happen at sea

[Redcellar]

When anyone buys something with cash or debt they buy it because they feel it is good value for money and at a price they feel comfortable with and are happy to repay, they buy it for what it can do for them not on how much money it can potentially make them.......most things that are bought lose value for example cars, furniture etc why not homes.....so they will just have to hold onto it for longer and try and pay back the debt faster...pay rent to the bank until they own part of it.....people who rent don't expect a cash lump sum when they leave, so why should other renters.

It's this constant denial by the masses that's crazy. People still telling them prices will rise beyond what they were in 2007. Yet absolutely no facts to back it up. What has changed is irrefutable. Tighter credit and lower prices outside of London. And there is nothing to suggest this will change. Nothing.

Slap them with a big wet fish and they still won't get it. And they don't give a stuff about the kids who have it way worse because of their excesses. It's all me me me nowadays I am afraid.

[live in hope]

It's this constant denial by the masses that's crazy. People still telling them prices will rise beyond what they were in 2007. Yet absolutely no facts to back it up. What has changed is irrefutable. Tighter credit and lower prices outside of London. And there is nothing to suggest this will change. Nothing.

Slap them with a big wet fish and they still won't get it. And they don't give a stuff about the kids who have it way worse because of their excesses. It's all me me me nowadays I am afraid.

Two young people who tried to better themselves, with little knowledge of what was about to happen. Daft i know. Maybe they should just have got a social house and let the rest of us pay for it.

[@contradevian]

Was interested by this paragraph

The Council of Mortgage Lenders, which represents providers, is careful not to criticise the FSA. But it indicates that lenders' observance of the new regime could limit the help available.

A spokesman says: 'Some lenders are clearly wary that if they treat borrowers in a certain way, for instance by granting mortgage holidays or allowing them to pay only the interest, there could be future allegations that they did the wrong thing.'

I'm wondering what that means. As far as I'm aware, lenders as well as lenders have no duty to mitigate loss. Maybe some HPC lawyers could comment. One wonders if "forbearance" could result in a slew of legal actions against lenders. "Well if they had repossessed sooner, our debt would have been lower."

Edited December 16, 2012 by Secure Tenant

[durhamborn]

When they bought there were many decent houses in that area for £80k.The fact is they didnt want a terrace,had to be the new built semi.

Those houses are worth around £80k and they will not see £180k in their lifetime.

To pay that for a 3 bed in Stanley was bonkers.

If they arent on a repayment mortgage then at some point they will be bankrupt and the bank will lose around 80k.

In 2001 £180k in this area would of bought you a country pile with a lot of land.To pay that for a 3 bed semi was crazy.In 2001 3 bed semis of that standard were around £50k.Oh and he used to work at Nissan.The wages there are well down on 2001 as they changed the contracts for new workers.They are on around £5k less then they were in 2001.

[live in hope]

Who encouraged them to buy. The Government? The Bank of England? The bank? The developer? The various vested interests?

Sounds like a case of miss-selling.

My view is that the lender should take the hit for negative equity as they should be better informed. They should be lending against the quality of the asset - they should take the hit.

Ignorant people are innocent.

As a booming country WE encouraged them. A very tiny number of people saw the consequences of it all. Certainly not 30 odd year olds .Lenders cannot take all the hits because we will all have to pay for it. Not a case of miss selling. Anything can go down in value. Thats not the sellers fault. Its the fault of society, which became a greedy place a few years back.

[Bloo Loo]

As a booming country WE encouraged them. A very tiny number of people saw the consequences of it all. Certainly not 30 odd year olds .Lenders cannot take all the hits because we will all have to pay for it. Not a case of miss selling. Anything can go down in value. Thats not the sellers fault. Its the fault of society, which became a greedy place a few years back.

The builder couldnt sell at the price he wanted.

he gets a backed scheme in place, offers 5K off and gets the client effectively what is a 100% loan.

we have saved a builder for a while, at the cost of people deprived of true price signals, and now its THEM that are paying the price.

[PatientlyWaiting]

I wonder how the comments section would now read if there was a child in the picture of the couple stood outside the house.

[redgenieuk]

Prisoners. Hardly.

And they're only going to pay 3.99 %. God help them all when normal rates resume. The world is truly full of muppets, but why would you have yourself photographed as being two. That's the real question in this article.

6% base rate plus 3.5% margin..... How many months could they take that?

I don't think I could taken that for many months!

When they bought there were many decent houses in that area for £80k.The fact is they didnt want a terrace,had to be the new built semi.

Those houses are worth around £80k and they will not see £180k in their lifetime.

To pay that for a 3 bed in Stanley was bonkers.

If they arent on a repayment mortgage then at some point they will be bankrupt and the bank will lose around 80k.

In 2001 £180k in this area would of bought you a country pile with a lot of land.To pay that for a 3 bed semi was crazy.In 2001 3 bed semis of that standard were around £50k.Oh and he used to work at Nissan.The wages there are well down on 2001 as they changed the contracts for new workers.They are on around £5k less then they were in 2001.

They made their choice rightly as you say and you have to live by those choices.

So all this happened in 2007...... What have they done about it since?

Have they been paying it down at all? Have they cut back?

No didn't think so.

No cars on the drive? Don't they drive or the 11 reg BMw needs to be hidden from view maybe? Who knows.

"Lenders are increasingly refusing to give back the money where the contract allows. Never be tempted to ‘hand in the keys’, however extreme the negative equity and other difficulties. A first port of call is the housing charity Shelter on 0808 800 4444."

Call them for sure, but sounds like its time to hand them in to me.

[billybong]

Likely they bought at a time when the Mail and the Express etc (and Uncle Tom Cobley and all) had headlines saying house prices were about to soar/surge/zoom and so on.

[Venger]

Tbh, they were just buying a home to live in as a family, now if they were BTL

They just wanted a home for their family excuse. Don't many of us, but many chose to rent as others with no fear of debt, no worry about value for money, pushed prices up and up and up, year after year after year. Way beyond what others were prepared to pay.

Their families don't come before other families just because they've made a massive claim on debt.

Who encouraged them to buy. The Government? The Bank of England? The bank? The developer? The various vested interests?

Sounds like a case of miss-selling.

My view is that the lender should take the hit for negative equity as they should be better informed. They should be lending against the quality of the asset - they should take the hit.

Ignorant people are innocent.

The final decision was with themselves. It's not anyone else's responsibility. Always blaming. Just like that thread the other day saying our leaders are to blame. Democratically elected LABOUR leaders in the House of Commons who I've never voted for, reflecting the desires of easy money HPI labour voting grubbers? Values can go down as well as up. Huge mortgage debt slags have made their own decisions. What's your solution. Write off the debt for hundreds of thousands of buyers, allow them to keep their homes, and non owners forced to pay more than otherwise would be the case?

[winkie]

[Executive Sadman]

A semi in some north east ex-mining town for £180k. I take it these two are southerners with little grasp of history...

[Freeholder]

36% drop in value. More of that needed. Bring it on.

[Redcellar]

Two young people who tried to better themselves, with little knowledge of what was about to happen. Daft i know. Maybe they should just have got a social house and let the rest of us pay for it.

I have to ask the obvious. Putting yourself into a precarious financial position by betting your house will increase in value - how is that bettering oneself?

In fact how is 'buying' any house bettering yourself. That says that those who don't are somehow lesser people and that's the biggest problem with this country. The stupid assumption that you have to own a slew of assets from a new house to a fancy car to be a better person.

[porca misèria]

Two young people who tried to better themselves, with little knowledge of what was about to happen. Daft i know. Maybe they should just have got a social house and let the rest of us pay for it.

Up to a point, Lord Copper.

Some of us steered clear of buying in 2005. By 2008, Northern Rock had happened, and failure to see the bubble for what it was looks like gross negligence.

Of course they were mis-sold. Now they're getting compensation in the form of zero interest rates. It's just a shame that form of compensation is such a blunt instrument.

[Guest unfunded_liability]

They just wanted a home for their family excuse. Don't many of us, but many chose to rent as others with no fear of debt, no worry about value for money, pushed prices up and up and up, year after year after year. Way beyond what others were prepared to pay.

Their families don't come before other families just because they've made a massive claim on debt.

The final decision was with themselves. It's not anyone else's responsibility. Always blaming. Just like that thread the other day saying our leaders are to blame. Democratically elected LABOUR leaders in the House of Commons who I've never voted for, reflecting the desires of easy money HPI labour voting grubbers? Values can go down as well as up. Huge mortgage debt slags have made their own decisions. What's your solution. Write off the debt for hundreds of thousands of buyers, allow them to keep their homes, and non owners forced to pay more than otherwise would be the case?

They took out a 100% mortgage part 'funded' by the builder, so they haven't lost any equity, and if they consider the mortgage paid so far as rent then they haven't lost anything.

Should declare bankruptcy and walk away. Businesses do it all the time, why shouldn't it be an option for little people? At 30 years old they're young enough to retrain, find new careers and pick up again in 6 years.

[Redcellar]

No. Not at all. They should be repossessed. But that should be the end of it as far as they are concerned.

Once or twice round the village green and banks won't lend quite so freely again.

And no - I think the banks should go bust, many of their staff sacked and their pensions turned to dust.

I'm not the forgiving kind of guy that my post suggests if you don't know me and my views.

But I do think that most people are totally ignorant and it is not fair that banks treat people in the way they have based on just pocketing all the profits and keeping everything they gained with absolutely no comeback.

They're only ignorant when the lose. When they win they tell us all they were an expert as they bag the cash.

Ignorance is no excuse by the way. You can buy independent advice from a real expert and they will explain all the ins and outs in plain English. But very few did, because that costs money. Why spend a bit of money on lifes biggest purchase eh?

[Saving For a Space Ship]

[media]Spinning Wheel - BST

Edited December 16, 2012 by Saving For a Space Ship