From: "Aztech" 
Newsgroups: uk.finance
Subject: Re: The Ladder, The Rung, and the Crowley
Date: Sun, 22 Jan 2006 21:00:48 GMT

"Tumbleweed"  wrote in message
<
>> That's a complete Catch 22, if a couple faces financial difficulties 
>> paying off a mortgage jointly then how could each manage with a mortgage 
>> of their own for a property bought at current prices and set at 
>> potentially higher rates, you're essentially doubling the liability and 
>> halving the earning potential, that doesn't stack up.
>>
>
>
> Much smaller house or flat than the previous large mansion they were 
> living in.
> The sort of smaller house or flat a FTB would want in fact!
> Example, they are in a 400k house, they move into 150k houses or flats. 
> Mortgage in total is 100k less. Rate might be less as they will each have 
> a smaller mortgage, smaller percentage borrowed.

Hrm, true but smaller places have tended to inflate quicker than larger 
homes, for example small terraces have gone from £30k-40k to £120k-160k 
whilst a semi might of 'only' gone from £100k to £200k, so in that case it 
doesn't provide enough a couple of £150k shoebox apartments. If they bought 
that £400k place for £200k then they're not guaranteed a smaller mortgage, 
one of them isn't at least!

Also, who is going to buy these larger broken homes if the ladder is going 
into reverse and essentially cannibalising itself, normally they would be 
the second or third hop for FTB'ers, but they haven't been around for a 
while and cannot even afford the first rung let alone further up.

Obviously the mortgage lenders will be quietly trying to sabotage groups 
like Relate to make up for the fact many BTL'ers are now looking to the 
stock market, some are MEW'ing to buy shares! Intrepid souls!