Monday, Nov 13, 2006

Negative equity from day one

Independent: On the ladder or stretched out on the rack?

Negative equity - owing more than your home is actually worth - is usually portrayed as the bogeyman of the UK housing market. In the early 1990s, tens of thousands of homeowners lost their homes as a crashing property market, coupled with high interest rates and rising unemployment, forced them to default on loan repayments. Yet today, growing numbers of buyers - mostly first-timers - are being encouraged to start off their life on the property ladder in just such a position.

Posted by uncle chris @ 12:14 PM (401 views)
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12 Comments

1. Leedel20 said...

The ignorance of youth, those who forget history will make the same mistakes.

Monday, November 13, 2006 12:57PM Report Comment
 

2. george monsoon said...

Leedel20

You can't blame the youth, they weren't around last time this happend. The older generations should educate them, but alas, its mostly the older generations that are exploiting the property boom and wiping their feet on the younger generations heads.

Greed.. it will do us all in the end.

Monday, November 13, 2006 03:16PM Report Comment
 

3. sovietuk said...

Dreadful place this country is becoming. Look at that recent Fairpak stitchup. Uncle Santa at HBOS has had helped to loose all your money children (ok with a little help from bad management at Fairpak) and if your mummy and daddy don't keep up repayments on their overpriced shoebox he'll repossess that as well.

Monday, November 13, 2006 03:47PM Report Comment
 

4. nearly30 said...

I don't think it's merely amnesia on the part of FTBs - we have entered a strange phase where even the banks are getting desperate - it's an Abilene paradox. By the way - I will have to change my name to justturned30!!!

The Abilene paradox is a paradox in which the limits of a particular situation force a group of people to act in a way that is directly the opposite of their actual preferences. It is a phenomenon that occurs when groups continue with misguided activities which no group member desires because no member is willing to raise objections.

Monday, November 13, 2006 07:44PM Report Comment
 

5. iguana said...

Am I being cynical, or was that what was once referred to as 'your duty' ?

Monday, November 13, 2006 07:48PM Report Comment
 

6. inbreda said...

Abilene paradox - - - - - well, you learn something new every day.

Happy birthday nearly30!!!

Don't worry, you'll own your own house outright before you're 35!!!

Monday, November 13, 2006 08:17PM Report Comment
 

7. nearly30 said...

iguana - if i understand your point correctly - my peers either bought back in the mid-1990s or they are just so put off buying a house they are waiting to see what happens next. We still remember the last crash. Incidentally, i'm not an FTB - thank god and won't be till i'm writing under the title of nearly40!! Oh, and I live in one of the areas identifed as being only 1 of the 3 areas left in the UK where you can by a decent house under 100,000. Average up from from 45,000 in mid-1990s to 115,000 today. Lunacy!!!!!

Monday, November 13, 2006 08:18PM Report Comment
 

8. nearly30 said...

inbreda - thanks for the birthday nod!!

Was thinking of whether to spend my birthday dosh on a 1-way ticket out of this country - then decided against it.

Got the feeling I could pick up a nice cheap 3-bed with new kitchen, bathroom, outdoor spa and fully-decorated interior for a rock bottom price in 10 years time - paid for by someone else's maxed out credit card and foolish borrowing habits. Happy dayz!!!

Currently debt-free and loving it!!!!

Monday, November 13, 2006 08:30PM Report Comment
 

9. sirgoogle said...

Happy birthday "nearly 30". I'm 40 (I was a FTB ages ago - but have rented for 12 or so years). Hang in there and look forward to financial bliss when you don't owe anyone anything and have a house. Not long now. The media sentiment has well and truly turned. Now they want to see a really good disaster so they can carry on reporting bad news. I think the tide is turning. Never seen so many doom reports. Just need Crash Gordan to take charge and Tony to go to the Lords and it will happen.

Monday, November 13, 2006 09:01PM Report Comment
 

10. uncle chris said...

I'm afraid our Tony is the most devious, dishonest and downright corrupt Prime Ministerwe've ever had and I would hope he has more chance of going to Strangeways then to the Lords. Although, if justice were ever to serve the honest, decent citizen of this country, a nice comfy cell in the Hague should be awaiting him.

Monday, November 13, 2006 11:21PM Report Comment
 

11. Dohousescrashinthewoods said...

Own a house outright - what a dream. My parents worked as expats and were able to buy their house outright with a 3-year loan around the turn of the 80s.

Perhaps the collective media property porn has so excited the nation that when everyone realises the emperor isn't wearing any clothes (Abilene paradox?) the correction will be as exaggerated as the boom. 2 for 1 on council houses?

If you decompose "Mortgage" you get "Mort" "gage", or "Death" "engage/grip" - in debt to the bank for the rest of your life. Sounds to me like this generation will be doing just that (and their children?). Nice for the finance sector. After bad debts they have a two-generation tax.

Tuesday, November 14, 2006 11:05AM Report Comment
 

12. inbreda said...

I agree with you uncle chris. It depresses the hell out of me that he is still dodging the bullets. There will be an inquiry at some point though. Then the weasel will be shafted.

Tuesday, November 14, 2006 02:11PM Report Comment
 

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