This is very important to me. The solution (imho) is to ‘cap’ the monthly repayments by deferring the interest, according to affordability. People should pay as much as they can to minimise the deferral but stay within their affordability so that their house isn’t repossessed. Repossession of houses helps absolutely NOBODY and causes misery and despair of monolithic proportions. People still need to be housed - so the government will end up having to house them. It’s utterly pointless.
The solution is to talk to your lender and agree a way forward ... the thing is they own your house, you borrow it till the last payment! They are not usually villains ... when you buy it the agree is 100% by both [ the term / the rate/ fixed/ flexible/ bank rate/ rates can go up or down ... you sign the agreement .......... tough if things change .. but then YOU have to adapt ... BACK WHEN I was paying 15% along with millions of others there was no help outside of your agreement [ no internet either! ] Your building society/ bank would send letters saying having difficulty paying then tell us do not just not pay. People believe it or not were losing out on repossession because they couldnt afford the expected so didnt pay anything ... instead still went on holidays etc ... MOST BUILDING SOCIETIES extended the period typically it 25 years but extended to 30 .. or added the non paid % of the monthly to the capital sum ... Over a period of time by not being greedy and rates came down and used to paying as much as they could when % was highest soon caught up with paying a higher amount than expected to relative to that monthly amount. [ pay rent? well it goes up and never goes down! so get used to paying higher mortgage rate and Balance plummets down! ] ps I was a licenced credit person for 8 years
So your solution is just tell them to pay and if not lose their house just because you did it? Repossession worked well back in the late 80’s didn’t it. You do realise that back then it was interest rates high, but heating and food not high. This is going to be worse and we are heading towards a recession that could be the worse we’ve seen in years and years. But hey you paid 15% interest rate so everyone else should struggle.
Absolutely. Also back then the crisis was caused by over borrowing and reckless spending. Todays is not - it’s the cost of raw materials increasing mainly due to OPECs exploitation of a war. It’s not the consumers fault this time but they are being punished. BTW, just how much % increase in profits have Shell just announced?
The difference when me and Mrs RP married is we saved after both working long hours. We only purchased what we could afford and credit cards were years away. Now we live in a cosseted 'must have' society where it's our right to have anything we want. It's a put it on the credit card existence. Whether it be watching Sky, the latest mobile phone, having children with no father to be seen after they're born etc etc. and expect others to pay. Sorry, engage your brains and wake up to a reality that we lived through. I'm fed up listening, reading, seeing people, especially on the BBC, today publicising they're hard up life.
What I don’t understand is inflation isn’t being driven by high consumer spending, but by the cost of raw materials and high fuel prices, so why does interest rates need to rise. If high demand was raising inflation I understand interest rates going up would have an effect, but that isn’t the case, it just seems to be hitting everyone twice, and won’t bring down inflation. Interest rates can always go up though, so I do think having them so low for so long has made people blasé about borrowing large amounts of money, it’s also driven house prices up artificially high. Traditionally 3% interest rate is still pretty low imo. The problem is more to do with high fuel bills & high inflation.
Agree with most of your points, however, a big difference to when you and Mrs RP started out is the price of houses compared to average salaries. Nowadays house prices are much higher in relation to average salaries than they used to be. Out of interest look at how much it would cost to buy the house you own today, could you have afforded the mortgage to buy it if you were starting out today, on the salary you were typically on when you started out? , obv I don’t know you, but if you could you aren’t typical.
There are differences: As Ashton said, house prices have rocketed to the extent that you need multiples of JOINT income to purchase an average house, whereas in our day it was only multiples of ONE income. Consumer goods like TVs and mobile phones have actually REDUCED in price compared to wages over the past 40 years. A VHS machine cost £400-500 back in the mid 1980s and a nice CRT TV like a 40 inch Sony Trinitron would have cost around £1000. In those days they really would be seen as major luxuries for the wealthy or extravagant. Nowadays a 72 inch Samsung smart TV is less that £1k and TV recording devices can be picked up for less than £100 - or you just stream what you want when you want. Foreign travel is another topic that the older generation often throw around ‘back in my day we had a week in Blackpool or WSM and was grateful for it, whereas you youngsters jet off to the Costas several times a year……’ - what is being overlooked (or deliberately ignored) is that again, like the consumer electronics I mentioned above, the cost of foreign travel has dropped considerably - to the extent that you can pick up EasyJet or Ryanair flights to Spain for between £20-50 return and the accommodation costs are also cheaper than before. A fortnight in Spain would probably cost less today than 1 week in a UK seaside resort - plus there is a big difference in the price of a beer or a meal too, so you’d need less spending money for 2 weeks in Spain. All these things however ARE luxuries, despite the relative cost reductions, whereas food, water, heating, fuel, clothing and a roof over your head are most definitely NOT. I’d be happy to pay more tax on those luxuries in order to offset the cost of the essentials.
why dont you read it properly instead of trying to make it fit your way of thinking?????? you obviously didnt live through it or you choose to make your assumptions .. the whole lot was inter related .. and YES A BIG YES everyone should address it... struggle well thats their budgeting ... HEY nice cheapo mortgage come and have some ... your spare cash can go on luxuries that last a few months maybe a year .. dont worry about the rate ever going up [ as you are warned it might ] those that dont budget properly are about to get a shock. As for everyone else "But hey you paid 15% interest rate so everyone else should struggle." [ at least get it right for once ] it should read But hey you paid 15% interest rate, .......... LIKE ABOUT 10 MILLION OTHERS so everyone else NOW should struggle! ...WELL WELCOME TO REALITY ....yes
sorry on wrong end of the stick .. it was a time of mass unemployment and no jobs with very litte in benefits far out weighed todays help and benefits and welfare payments
101% spot on the button today is a world of easy come easy go ... well the easy has just dropped out ... people dont want to work 4million jobs and 3 million unemployed lazt asswipes most of them scroungers not made any better by the illegals and the luvvy duvvy world
ASHTON it is difficult to understand just looking at something, to explain would be a cosy seat, a pint or 2 [ no more! ] and be able to elimate queries as you go, demand does not drive inflation except of wage demands which drive up costs due having to raise price of what is bought to pay for the wages that make it ... a vicious circle. Currently it is profiteering due to an outside source ......... PUTRID ......... COVID ......
NOT THAT MUCH DIFFERENCE in fact take the low % of the past few years and cheaper [ maybe ] now? My first mortgage was £3495 .. £50 deposit [ special offer on new build think it was £75 ] interest rate was around 6% in mid 1960's my weekly wage was about £21 per week my monthly payment was £28 14s and 47d .. do the sums on a mortgage 3- 4 years ago = circa 2% fixed term 5 years
really in the mid 80's 40" !!!!!!!!!!! think they did a 24" in early1990's [ got one in the attic 1992 cost £940 still works but weighs a ton ] maybe a 20" /21" late 80's most were 13" .. delivered a few of them 24" ones !
you are talking 80's when the holiday thing had taken off , oil was getting cheaper, planes bigger hotels built in great numbers plenty rooms to be filled so prices cheaper .... comparisons are useful ...however the ancient adage what goes up must come down .. shares / interest /flights/hotels / and at the down point there will be losers and a cost to those at the increase! its life!
Ok to put it into more basic terms: Back in the 1980s: (In proportion to todays wages): Houses were cheaper Mortgage borrowing was more restricted (the multiples of your salary you were able to borrow) Consumer goods were expensive Foreign travel was expensive Today: There are loads of jobs available Houses are VERY expensive and many households on average income need around 5 times their combined annual salary to buy. Consumer goods are dirt cheap Foreign holidays are dirt cheap Fuel is expensive Food and drink is expensive We can all live without the consumer goods and holidays, but the not the essentials.
Fair enough - I concede on this. It proves my point however - a 24 inch cost £940 back then but for the same money today (less in real terms considering inflation) you could have a complete home cinema system.
