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5 June 2008

The day we knew would come

Tales of housing woe

By Aloysius McDowell

Mary Chapman, army captain, 26

I bought my house in Chichester four years ago with my ex-partner: we wanted to get on the property market early, so we took out a massive mortgage. When we split up we put the house up for sale, but it’s been on the market for six months and it’s just not moving. If it does, we’re going to end up in negative equity. We bought it for £200,000 and it looks like we’re going to end up losing £20,000. If I can’t shift it in the next three months I will take it off the market and carry on renting it out instead.

The situation affects my whole life – until I sell that house I can’t change jobs; I can’t move forward because I’ve got to pay this flipping mortgage on a house that isn’t making any money. Currently my ex-partner and I split the mortgage. I looked into paying it by myself, which I can afford to do, but the mortgage lenders wouldn’t allow me to do it, although I’ve got one of the steadiest jobs there is. They just don’t trust anyone at the moment.

The more I look at it, the more I wonder what the point of investing in property is when you can just rent.

Dan Snow, historian, 29 (pictured)

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I’ve been renting in west London since leaving university in 2002. I feel smug that I’m not currently a homeowner with a mortgage, but, having said that, I’ve been wasting money on rent for years. I’ll probably end up buying somewhere really expensive, the first place I like that comes along, and it’ll be much harder to get a mortgage than if I’d invested when I first could.

Adam Alexandroni, musical director, aged 33

I am very worried about the drop in house prices. I bought a two-bedroom apartment in Crystal Palace in July 2007 when the property market peaked. I paid the asking price because competition was intense – the seller had several offers within two days of the property going on sale. Now, like everyone who bought last year, I’m feeling vulnerable. A small drop in the value of my property will put me in negative equity, whereas if I’d bought in, say, 2003, I would have gained so much that I could have absorbed a little fall. But if I hadn’t bought when I did, I would be stuck renting. I know that in the present climate, although I earn a good salary, there is no way I could get a mortgage with the deposit I had.

Quentin Letts, journalist, 45

I bought a studio in Paddington for £72,000 in 1988 and then sold it for about £30,000 less in 1994, which was rather embarrassing and felt disastrous. The negative equity business was horrible. I was piling a huge proportion of my fairly small salary into mortgage payments. It was like being at the wheel of a sharp-descending aircraft, being strapped to the seat and not being able to get out. The Paddington flat was just a tiny little basement with a pull-out bed which I’d bought because I thought it would be important to get on to the property ladder. I got sold a duff mortgage scheme by a very sharp salesman – I was pretty clueless. It came out all right in the end because I stayed in the property market; I was able to get a cottage in Gloucestershire for a knock-down price and that later cushioned me from the loss. But at the time all my savings were blown, plus half my salary, and I was walking around in pretty threadbare suits for a while.