British pound hits record low against the dollar

Having lived through, and lost all my shit, in the last financial crisis as a young man I'd also like to say something more directly to you. You did not let your family down. You thought you were making a good financial decision to help secure their future. Nobody, no matter what they tell you, can say they can predict bubbles. More aptly put, your nations economics, and predictions thereof, do not rest on your shoulders.

The governments of the world will have to step in. Pay attention to government run programs to protect you during a recession. If you do default or get foreclosed on keep all of your records. I fled real life and joined the military after defaulting on my debts. In my last year of service I challenged the total of my debt as reported by creditors and won because they couldn't prove custody or the amounts.

There's a long wind between "oh shit, things look they can be bad" and "oh shit, I'm fucked". Don't jump on the latter outlook just yet, try to ride this out and look for opportunities that will help you safely navigate these times.

Well that's the problem. What do you do? Rent and wait for a crash that might never happen or just buy and hope it works out? Both are a huge risk. Those who waited in recent years now have to buy at much much higher prices.

> Wouldn’t that be even worse for your younger and future family members?

I want rates to rise and for housing affordability to come down. I even planned for that. What I didn't expect was for rates to rise 6% in a year or for there to potentially be a housing crash so soon after I brought. My house not decreasing in value with a slow increase in rates would have been fine.

> I don’t think you’re stupid, but this does seem like shortsighted thinking.

Yeah, perhaps. I just wish everyone who knew this was going to happen was around a couple of years ago to talk me out of it. Honestly it seemed like everyone was of the opinion that buying a house was generally a good financial decision until a few months ago. Now everyone is telling I made a stupid decision and should have rented. I don't know what to think anymore.

I did try to calculate affordability under reasonable circumstances. Most people two years ago would have recommended checking that you could afford interest rates to normalise to 5%. I could (with a bit of a buffer) and if they were to go higher over say 5 years that would have been fine because I would have time to pay down my mortgage and hopefully would be making more by then. What I didn't account for was the huge increase in energy bills, cost of living plus interest rates going above 6% in a year. I know I should of and apparently people did, but I'm still not clear how I was meant to predict the largest affordability crisis in UK history.

Not making excuses though, I feel upset and annoyed at the timing. But ultimately I just feel like a failure for letting everyone who relies on me down, and that's my doing.

Hope this doesn't come off as me making excuses, I'm just trying to explain my perspective. I wasn't trying to gamble on house prices going up or knowingly making a risky bet as a lot of people have been suggesting to me recently. I was just trying to buy a house for my family.

What you're describing is known here as an ARM (Adjustable Rate Mortgage) and they are a very scary thing because you never know for sure what the macro economic situation will look like.

But yes, ARMs are basically the entire UK market. We don't have long-term fixes like in the US. The longest fix we have here is 10 years and they're quite rare. Overwhelmingly borrowers go with 2, 3 or 5 year fixes. I believe the US is a huge outlier in that the majority of your mortgages since the GFC have been 30 year fixes.

Things are very bad right now, but I'm still exploring options. It's possible at this point that we might still get through this if we're extremely careful with money (as in beans and rice every day for the next two years) and rates don't go any higher. It also assumes I don't lose my job which is at risk because of the recession. I'd like to say it's 50/50, but realistically there's probably a 20-30% chance I'll be okay at this point which isn't ideal, but it's still a hand worth playing.

I would bet against the government stepping in because here in the UK you have renters who hate homeowners, and boomers who typically own there homes outright and therefore tend to blame people struggling with mortgages because in their day rates were 10% (obviously this is never adjusted for affordability, but still). Either way there is close to zero political incentive to help millennials who brough homes in the last two years. Nor is there any precedent to helping home owners in my position. Our new PM is also a bit of a Thatcherite and may actually be trying to raise rates with her economic policies which I think is part of the recent the market is reacting as it is.

Honestly I doubt there's really a way out if things go against me any more. I'll have to declare bankruptcy and take it from there I suppose. I'm trying to stay strong, but I don't deal with stuff like this well. I don't even know if I want to deal with it. There's no reward at the end, it's just more suffering.