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Kilkrazy wrote:

Albatross wrote:

Kilkrazy wrote:It came about because people came to view mortgages as an investment, when actually they are a way of getting a roof over your head.

Isn't securing a roof over your head for the long-term a good investment for the future? Or have I been taking fething crazy pills again?

A mortgage doesn't secure your home since if you default you will get kicked out with the debt still owing.

A long term lease or rental is an alternative way of having a secure home. The payments are fixed so there is no danger of an interest rate rise overwhelming your ability to meet the payments.

The attraction of mortgages is that we expect the value of the house to climb rapidly and exceed the value of the mortgage after only a few years, thus yielding a tidy profit on eventual sale. Note that you can only realise this profit by liquidating the asset, which leaves you without a home.

What people hope to do is climb the mortgage ladder until they have a family, get the kids through university, then sell up and retire to a smaller and cheaper property on the coast.

This has worked quite nicely for some people, but it has gone badly wrong for others.

Got a better idea?

I mean, you say all this as if I haven't considered any of it before.

I don't know to what extent you have considered it.

Many countries have a much larger rental sector than the UK, and it does not cause the disintegration of society.

The key problem in the UK market is the low rate of new home building compared to demand.

There are various reasons for that and various ways it could be addressed.

kronk wrote:

Medium of Death wrote:An interesting point would be: Can the government/loan provider sell your debt on? Potentially increasing the interest rate, if it is set higher by the new owner. Or is it set regardless of who owns it?

Seeing your Union Jack under your name, I should preface this with "In America," as I don't know about your financial stuffs.

If you have a fixed interest loan, then it is set regardless of who owns it.

If you have a variable interest loan:

1. Don't do that.
2. There are terms and conditions of that loan that the new owner of your debt still has to adhere to, which is generally some interest rate standard metrix +x%.

We paid my wife's loan off slowly because the interest rates were lower than our home loan. So, it was better to spend extra on the house's principle than her loan.

Currently the interest on student loans tracks the base rate of interest (set by the Bank of England) by -0.5%. The base rate is currently 0.5%, so students pay no interest on their loans. However there was some talk of applying a real rate of interest to student loans, of 3-4% above the base rate. Also having such a low rate in interest is a little bit anomolous and it wont remain that way for ever, so in a few years we can realistically expect students to be paying 5-6% interest on their loans, which will be around £30k+.

Unlike normal loan markets there will be no choice in which products to get, because even the most stupidly blind drunk banker is not going to give a student, with no means of income, £30,000 on the off chance that in 3 years they will earn enough to pay it back. So the situation become one where the rich can just afford the tuition fees straight away, and the middle and working classes will send fewer of their children to university.

This will result in a reduction of highly skilled professionals in the future, because it could be expected that the drop in student numbers will be from all degrees equally, rather than those you which everyone seems to have a distaste for, which will ultimately mean that there will be fewer nurses, teachers, engineers, and scientists, because these professions earn less money that your lawyers, bankers and doctors, and these professions will be filled with people from predominantly rich back grounds, thus reducing social mobility.

I also find it amusing that everyone is having a dig at media studies, when the media is the most powerful tool for social control that has ever existed. Think about how many times you have bought a product after seeing an advert for it, or how many times these has been a legislation change introduced on the back of a public outcry proliferated by the media. Honestly it is a doss course, but one that is very useful in todays society.

Albatross wrote:

Gorskar.da.Lost wrote:

Albatross wrote:

Gorskar.da.Lost wrote:

Ahtman wrote:

Kilkrazy wrote:^^ This, this, all of this (x2).

x3

X4.

My personal problem with this increase in fees is not so much that it is an increase, which I could understand and appreciate (after all, there's debts to be paid and, let's face it, money doesn't grow on trees) but that for many good universities it is effectively tripling overnight. This is a huge increase, and were I not safe from the fees (by a year), I would not be able to afford to go to university...

Why? You don't have to pay the fees up front. Perhaps you're just not that committed to reading history?

Maybe so, but I still have to pay them. As you would quite rightly point out, that money's got to be paid back, and despite all the commitment in the world I cannot pay back £36,000 back (not including living and accomodation costs) if it is not within my budget to do so. The new legislation seems to assume that I, University Student A, will immediately go into a high-paying job at the end of my degree, which is of course simply not the case; even the courses considered to be vital don't lead to a great job instantly.

Which is why you don't start repaying your loans until you meet the earnings threshold, which has just been increased to £21K. My missus has just started repaying hers - she pays about £100 a month, which is well within the means of someone earning £21K or above.

True enough, but my dad earns that (just about) and he's a Network Rail signalman. Again, he's unlikely to be able to bear that kind of debt on top of all the other stuff he pays for per month. Admittedly, I don't intend to be saddled with kids myself quite so soon, so perhaps it's not quite the same financial situation, but even so, £39,000 of debt is a lot to consider. My mam, who went to university to study accountancy, ended up with £10,000 debt at the age of 18 in student fees and she's only just paid it off now, in her late thirties. It stands to reason that a larger debt will accordingly take a larger time to pay off, interest and the like being factored in.
NOTE that this is mostly personal anecdotes, so take 'em with a pinch of salt, as they may not be typical.