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PostPosted: Thu Feb 23, 2012 12:19 pm 
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How did this family get it so wrong?

http://www.dailymail.co.uk/femail/article-2105011/Stuck-rent-trap-How-middle-class-family-kept-remortgaging-home-pay-bills-longer-afford-repayments.html

Quote:
Like many families, Shona Sibary and her husband blithely took money out of their beloved Hampshire home, smug in the knowledge that burgeoning house prices would protect them. Now, in their early 40s, they find themselves back at square one, in rented accommodation, and with little or no hope of ever getting back on the property ladder.


I think I can spot the problem

From the article..

Quote:
in our early 40s, paying a private landlord £2,000 a month which leaves us with a big fat zero in our bank account.

Quote:
Our interest-only mortgage payments had soared to nearly £3,000 a month.


What an error to make and at a time when interest rates are (and being held) at historically low levels.

Certainly a prime example of why fiscal responsibility should be on the curriculum in our schools.


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PostPosted: Thu Feb 23, 2012 5:04 pm 
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geezer466 wrote:
Certainly a prime example of why fiscal responsibility should be on the curriculum in our schools.
State education is very unlikely to overcome what is in effect political propaganda. The housing "value" boom, with readily available cheap money were all part of the political "feel good factor" that was officially created to bolster the New Labour experiment.

From the article: http://www.dailymail.co.uk/femail/artic ... ments.html
Quote:
And through a combination of bad financial planning and events beyond our control we were forced to sell.
Shona Sibury makes it sound like some kind of accident. They forgot the golden rule; to live within their means. I suspect they allowed themselves to be seduced by all those artificially glossy TV property programs, and backed up by the New Labour experiment of painless wealth.

Quote:
Certainly, we overstretched ourselves when we bought our lovely period home for £419,000 in 2002. But with mortgage companies practically throwing loans at us in a rising property market, we slept soundly at night, smug in the knowledge the house was making us money.
On your own admission “we over-stretched ourselves”. You didn't buy it – you BORROWED money you should have walked away from. As early as 2000 it was clear that the big lend and borrow to buy ever-increasing-in-value-houses was a scam that was destined to disaster. And that brings me to another common misunderstanding; mortgagees and home-loan borrowers are constantly referred to as HOME-OWNERS. They are not home-owners UNTIL the entire debt has been redeemed.

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Heavily pregnant at the time, I wandered dreamily through the vast, airy rooms imagining my children growing up here.
That's another problem; too much imagination and insufficient reality. The heart was ruling the head – not uncommon in modern times.

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Besides, with the crisis in the UK pensions industry in full swing it made sense to put everything we owned into a house.
The pensions crisis should have been a very clear warning that something was seriously wrong in the world of finance.

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But over the next seven years we steadily, and stupidly, stretched ourselves too far. It started with the thousands of pounds we spent renovating. When we ran out of money we didn’t worry — we just remortgaged.
Just the same as Gordon Brown did with the national economy. How did so many apparently sensible people come to believe that houses were money trees just waiting to be harvested?

Quote:
In our defence, we weren’t spending the money on expensive designer clothes, luxurious holidays or flash cars. Much of it was going on school fees and upkeep of the house. By the beginning of 2008 we had remortgaged three times, taking out a staggering £500,000 loan on a house that wasn’t worth much more. Our interest-only mortgage payments  had soared to nearly £3,000 a month.
Debt is debt whatever the reason for borrowing money. Anybody who takes out an interest only mortgage isn't buying ANTHING – they are renting from the “lender” and gambling that inflation will inflate their debt away. Not exaclty sound economics.


I don't believe Shona Sibury is as hard up as she makes out:
http://journalisted.com/shona-sibary?allarticles=yes


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PostPosted: Thu Feb 23, 2012 7:42 pm 
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An excellent summary Westonman and one I find myself 100% in agreement with
Houses are for living in not to be bought for speculation or used as hole in the wall machines. It is partly because of these two factors that the Country is in such the state it is at the moment.

I was aware that Ms Sibury had appeared in a Mail article before although I never realised she is a wannabe journalist.

Her article could be summed up as: "I can't understand why I don't still have my cake, after I ate it".


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PostPosted: Thu Feb 23, 2012 9:20 pm 
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the hardship of buying is over for me, and reaping the rewards now as only the poll tax to meet apart from the usual living expenses and don't know how people manage on an old age pension if still carrying a mortgage. having been robbed all my working life now just the tax man robbing me with every thing I buy, so be prepared to pay tax all the way to the grave, and sometimes beyond. :( :(

_________________
Its not always the biggest and the bestest, its them that make the least mistakes.


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PostPosted: Thu Feb 23, 2012 9:24 pm 
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Joined: Mon Jan 16, 2012 3:25 pm
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01895 250 111
Civic centre switchboard for refferral to Housing Benefit and Council tax benefit office

Face to face meetings available by ticket at the reception in the borough civic centre

Housing is provided by the councils own housing department and also some housing associations.

If you live locally you can go to the Councillors Ward surgeries, details of which can be found on the council website and explain your family or group of friends situation.
A costed assesment on the rent you can pay using the money Advice services budget assessment, HMRC and DWP benefit amounts, all of which checked by an auditor ,bookeeper, accountant
Previously the council had a policy for FE / HE students flatsharing to make a claim for council tax remission by October 31st as 16 to 18 year olds left one part of education to another. However the best ones at the top of queue would have arranged housing and had these forms in for when the exams finish. There is a london wide student housing website for housing and each local authorioty can suggest a list of estate agents or housing assns for part rent and part buy under housing assn HMO regulation criteria.The clever ones could now try for shared ownership and then after study sell up and get a part rent part buy flat for two of them under common law partnership laws.

If you need assistance as in special needs, there is teh adult social care department within teh council and three community mental health units for three Westminster constituencies of Hillingdon.

There is a pschyiatric inpatient hospaital on the HIllingdon Hospital site including a rehabilitation unit for illegal substance and alcohol for which there is a borough wide service centre at Old Bank House in Uxbridge opposite the original Tescos. This Health trust covers four - seven London boroughs for varrying services for transfers from inner London and the Home counties where living on state benefits is financially difficult either owing to rent rates paid for by the Housing Departments Council tax assessment and sometimes the housing / transport being cost prohibitative.

If you are unwell or find talking over the phone difficult you can check online free in the local library or phone and ask for a written address to send writen correspondence either by post or email.

I'll post the numbers and addresses over the next few days in posts below this


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PostPosted: Fri Feb 24, 2012 6:46 pm 
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Joined: Thu Jan 12, 2012 10:25 pm
Posts: 288
Yes never buy a house as an investment , first mistake
second , having children they could not offord
Very sad story , now they are being fleesed by a private landlord
But i must say over the years with Thatcher , it was what we were told , the way forward
then companies offering stupid money , was above the normal 3 x salary + 1 etc
so prices went up , as greed took over .
Now have the double whammy of low wages , poor job security , and vastly
over priced housing ,


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