The Greatest Robbery Of The 21st Century

[EWS]

To carry on from the discussion in the Betting Forum (Never Chase Yer Money). What would you like to see from the Budget? Personally, I would like to see incentives and help for first time buyers in the property market. I am unashamedly going to re-post what I put in my last reply in the above mentioned topic;

I would argue that property wasn't the problem. I would say that it was banks giving mortgages out at 110-130% of the value of the property to people who they knew fine rightly would never be able to pay them back. The reason house prices rose, was as a direct result of banks giving out more and more money. As they did this, house prices got more expensive. Just because the mortgage market is the largest lending market out there placed all the focus on that.

Property was just an innocent bystander in it all, and the problem lies firmly at the banks and idiot people. Who in their right mind gets a mortgage at 120% of the value of their house? It puts you in negative equity straight away. In the end, it has put people like me, who have come out of university with an employable degree, gone into a good, well paid job and is looking at getting on the property ladder when it is low. The fact that due to my age, and my former status as a student means that I find it difficult to get credit anyway is a different matter.

The government should be encouraging people to start buying houses again, and that should drive the market. What they need to do is provide some incentive for the banks to give out mortgages to us. A recent enquiry on my behalf found that most places were willing to provide a mortgage based on my hypothetical earnings on a moderately priced flat, but with a 15-20% deposit required on that property.

To put that into context, I live in Glasgow. Unless I want to get stabbed every day, I would be looking at somewhere between ?125-175K for a good quality flat in a decent location. At my current wage scale, it would take me a good number of years to save up for a deposit (that takes into account current living expenses), by which that time the housing market would have recovered and I would most likely need a higher deposit. Tell me how that is fair?

We are consistently told that the youth are the future of the country. Well how about they start acting like it, and helping us out. We aren't all spongers you know, and some of us did go to University with the outlook to have a good job at the end of it - not to do an 'arts' degree.

Maybe this discussion is best kept for the Serious Topics forum?

Edited April 22, 2009 by EWS

[Yngwie]

I don't look forward to budget day, every one I can remember has made me worse off and I fear this one could be really bad.

Anyway EWS, the thing about ladders is that you are meant to start at the bottom, and sometimes that means living somewhere scummy*, or further out than you would like. But at least it gets you on the ladder.

* However, I take no responsibility for this advice if you end up getting stabbed.

[Johnboy]

I sympathise with EWS in his Catch 22 housing situation - getting stabbed every day can't be much fun either.

Do you have to live in Glasgow EWS?

[EWS]

I sympathise with EWS in his Catch 22 housing situation - getting stabbed every day can't be much fun either.

Do you have to live in Glasgow EWS?

Do I have to? Yes, in my opinion I do.

It is the heart of Scotland, has a great airport that provides links to places I need to go to because of work, my girlfriend is at university there, I don't drive and actually enjoy living there.

It is a very enjoyable place to live. If you stay out of the areas where you get stabbed every day.

[absent friend]

I would argue that property wasn't the problem. I would say that it was banks giving mortgages out at 110-130% of the value of the property to people who they knew fine rightly would never be able to pay them back.

At no time did banks give out 110-125% mortgages - they gave out 95% mortgages and up to ?30,000 personal loans, at the same rate. i.e. If the house value was in excess of ?100,000, total borrowing of 125% could not take place. Believe it or not, affordability had to be proved, payslips/bank stats/credit reports all being used as was the clients maritial situation.(married with family received a lower loan than a single person earning the same amount)

The reason house prices rose, was as a direct result of banks giving out more and more money. As they did this, house prices got more expensive. Just because the mortgage market is the largest lending market out there placed all the focus on that.

Clients could not get mortgages on properties without surveyors confirming the value as being correct. The surveyor therefore dictated the loan amount, not the lenders so maybe they are the villans.

Property was just an innocent bystander in it all, and the problem lies firmly at the banks and idiot people. Who in their right mind gets a mortgage at 120% of the value of their house?

With property rising to this level over a 12/18 month period, it is not difficult to see where the thinking came from. 125% at outset, 100% loan in two years, 90% in 4 years etc (if the market carried on growing) and it helped a lot of EWES get onto the property market. If you took out a 125% borrowing 5 years ago, you would still have a very healthy equity within your property today!

It puts you in negative equity straight away. In the end, it has put people like me, who have come out of university with an employable degree, gone into a good, well paid job and is looking at getting on the property ladder when it is low. The fact that due to my age, and my former status as a student means that I find it difficult to get credit anyway is a different matter.

Why buy now when the market is still in free fall, maybe waiting for a wee while could be financially astute.

The government should be encouraging people to start buying houses again, and that should drive the market. What they need to do is provide some incentive for the banks to give out mortgages to us.

They have tried this and the banks just kept the money. I feel the government should take an active role in the purchase, say 20% and thereby owning that amount of your property and gradually you buy them out over the years to come, at the then value. Shared ownership in a big way, with their books showing an increasing property value in the house market, a mortgage portfolio belonging to us.

A recent enquiry on my behalf found that most places were willing to provide a mortgage based on my hypothetical earnings on a moderately priced flat, but with a 15-20% deposit required on that property.

To put that into context, I live in Glasgow. Unless I want to get stabbed every day, I would be looking at somewhere between ?125-175K for a good quality flat in a decent location. At my current wage scale, it would take me a good number of years to save up for a deposit (that takes into account current living expenses), by which that time the housing market would have recovered and I would most likely need a higher deposit. Tell me how that is fair?

The bank of Mam and Dad is being used due to this - equity release from the family home for a deposit. Not always possible, I accept.

We are consistently told that the youth are the future of the country. Well how about they start acting like it, and helping us out. We aren't all spongers you know, and some of us did go to University with the outlook to have a good job at the end of it - not to do an 'arts' degree.

Well the requirement to OWN a property is relatively new in this country and indeed is not reflected in Holland or France for instance. Maggie fuelled the monster with council house sales.

However we are now there and I would agree that the market will stagnate if we do not have first time buyers coming into the scene to create the funds for the chain to move upwards, the builders to be more active and help with the unemployed in that industry.

Maybe this discussion is best kept for the Serious Topics forum?

[Hiro]

We are shafted big stylee and the budget yesterday was a nonsense. Mr Darling has just delayed the big decisions until they can get an election out of the way. The only problem is that Mr Cameron and his cronies haven't got any better ideas despite their constant bleating.

It's got to the point where I may consider moving abroad in the near future. I qualify as a chartered accountant in a few months and I've got potential opportunities in Australia and Canada. Although not unaffected by the economic mess they appear to have avoided the brunt of this.

[Canada Bob]

We are shafted big stylee and the budget yesterday was a nonsense. Mr Darling has just delayed the big decisions until they can get an election out of the way. The only problem is that Mr Cameron and his cronies haven't got any better ideas despite their constant bleating.It's got to the point where I may consider moving abroad in the near future. I qualify as a chartered accountant in a few months and I've got potential opportunities in Australia and Canada. Although not unaffected by the economic mess they appear to have avoided the brunt of this.

I've been to Oz and there's a lot to be said for it, but if I knew a better country than Canada I'd be living in it.

The standard of living for {say} the average blue collar worker is way higher than in the Untidy Kingdom, yet the cost of living is lower than in the UK. Have a look at the type of house you can buy for 250,000 quid / $450,000 in Nova Scotia, or any other Province on...

MLS.ca

Or on...

Tradewinds

Here's one of my favourites, just down the road from us, we are on a Golf Course complex, with 2 free memberships, this development is on the Ocean Front, with one of the best surfing/fishing/kayaking beaches anywhere. The asking price is around 220,000 quid, but unlike the "offers over" system in Scotland in Canada most homes sell for 95% of asking price, could be even lower right now...

Beats Wigin, that's for sure...

Or...

Claussen Walters

Edited April 24, 2009 by Canada Bob

[Hiro]

We are shafted big stylee and the budget yesterday was a nonsense. Mr Darling has just delayed the big decisions until they can get an election out of the way. The only problem is that Mr Cameron and his cronies haven't got any better ideas despite their constant bleating.It's got to the point where I may consider moving abroad in the near future. I qualify as a chartered accountant in a few months and I've got potential opportunities in Australia and Canada. Although not unaffected by the economic mess they appear to have avoided the brunt of this.

I've been to Oz and there's a lot to be said for it, but if I knew a better country than Canada I'd be living in it.

The standard of living for {say} the average blue collar worker is way higher than in the Untidy Kingdom, yet the cost of living is lower than in the UK. Have a look at the type of house you can buy for 250,000 quid / $450,000 in Nova Scotia, or any other Province on...

MLS.ca

Or on...

Tradewinds

Here's one of my favourites, just down the road from us, we are on a Golf Course complex, with 2 free memberships, this development is on the Ocean Front, with one of the best surfing/fishing/kayaking beaches anywhere. The asking price is around 220,000 quid, but unlike the "offers over" system in Scotland in Canada most homes sell for 95% of asking price, could be even lower right now...

Beats Wigin, that's for sure...

Or...

Claussen Walters

The value for money on offer is of course one of the attractions of going abroad. I currently reside in Belfast and the house prices here would make you weep. On a par with the South of England despite wages and salaries being a 3rd lower. How it ever reached that is beyond even my maths.

If I was to make the step I would be on a 12 or 18 month contract. At the end of which I can make a decision on my permanent future. Having looked at rents though it also seems to be much lower. However, the city I work in probably won't be a free choice i.e. I'll have to make a choice between 3-4