92/3 recession

Following on from the last thread. Any specific memories from this time? I can remember suddenly the attendance of after school clubs dwindling quite rapidly as the kids parents couldnt afford the sub. Surprising really as this was quite a middle class suburb

Liverpool played Genoa on the night of Black Wednesday.

El Jarvo wrote:

Even with today's problems, that one-bedroomed flat would now still easily fetch well over 200k!

At least.

Watched Andrew Marrs History of Britain the other day and it had a section on that broom cupboard going for 35k opposite Harrods.

I rememeber a fair bit of the recession. Black Wednesday remain clear, I remember the little headline that came on at the bottom of the telly during the game, and bits of the build up. I didnt really understand what was going on, but I knew a lot of people were losing their jobs. I dont think as a family, we were effected too much. My granddad may have been, as he sold his buthcers shop in August 93 and retired, and the got bored two months later and helped out at a load of butchers for about the next ten years.

Funny................I remember negative equity in 89/90? Bought a flat in Brighton then a flat in London and managed to lose quite a 'bit' of money in the process.

Thank God for Parents eh?

Currently have equity in a house, but after it is sold I will NEVER have another mortgage..its just bricks and mortar, not worth the headache.

I prefer to sleep at night.

I was jobing around the country building houses in a gang as a young lad,good money,bute laughs. Then work dried up overnight,and I had to go crawling home to our mam,who was struggling herself,bless her.

Uncle Liam wrote: Liverpool played Genoa on the night of Black Wednesday.

September 11th attacks were Liverpool's fault too; they played Boavista on that night.

Boatraceface wrote: I was jobing around the country building houses in a gang as a young lad,good money,bute laughs. Then work dried up overnight,and I had to go crawling home to our mam,who was struggling herself,bless her.

Sounds familiar! :\ohwell:

LeggyD wrote:

Uncle Liam wrote: Liverpool played Genoa on the night of Black Wednesday.

September 11th attacks were Liverpool's fault too; they played Boavista on that night.

As much as I would like to blame Liverpool for that, I dont think i can, mainly on the grounds the game took place in the evening.

I remember that, and being genuniely shocked that that nights games went ahead. United game the next night, which I think was againt Juve was called off.

Actually, I couldn't see why UEFA thought it neccessary to postpone the Wednesday 12th games

Flight restrictions.

I was due to go to Belfast on the Friday and couldnt go to the Sunday due to the backlog.

If you think about it though, I would have thought there wasnt a safer time to fly!

mm ,, recession did start a bit earlier,, had to take 2 jobs 89/90 as mortgage rate went up to 16%!! i pay less on my mortgage now for a larger house that i did back then ,, trying times, though didt get the 20% odd wage rises of the early 80,s to compensate for the "pain" that would help me,, why thank you mr chancelor it realy did.

had lots of friends who just walked into banks, building societys and handed the keys back,, one even cleared off to bolivia for a couple of years to escape the claws of the interest hunters,just managed to escape negative equity though it was a tough ride for a few years and cant believe house prices have gone through the same route again ,,

i think about where we have been.

El Jarvo wrote: Friend of mine bought a one-bedroomed flat in Rotherhithe for 55k. (This was pre-Jubilee line extension).

Interest rates soared and his property was devalued to just 29k!!! Can't believe that was only about 15 years ago.

The second his flat got back to around 50k he sold up and moved to Brixton!

Even with today's problems, that one-bedroomed flat would now still easily fetch well over 200k!

That exact same thing happened too me. I've only recovered from it in the last few years.

I was living at home being a stoodent so was completely oblivious to it. My ma had just gone back to full-time work in 1990 after 6 years off to drop my three wee sisters in quick succession so I s'pose there would've been more money coming into the house than there had been for years despite the recession.

The whole negative equity thing is pretty much a non-issue up here. The house price to earnings ratio has always been within reasonable boundaries (think it's currently circa 4.5 in Glasgow compared with over 8 in the South East) which means there's none of these over inflated "bubble" prices that burst during times like now. Prices in the West of Scotland actually rose by 2% in the last quarter and are expected to grow by 4% over the next twelve months.

If you've got a bit of cash lying spare or you can re-mortgage at a reasonable rate (not easy, I know!) now is a great time to buy. Loads of distressed sellers out there panic selling at below market value. I've been filling my boots that last few months with a few buy-to-let bargains.

That said I bought a Hovis loaf out of Somerfield today and it cost me £1.43!!!!!!! Only noticed when I checked my receipt. Am I dreaming or was a loaf of bread not less than a quid about a year ago?? Somerfield's own brand from now on.

I was living at home too, preparing to get my first pad. I had money to burn in those days.

What worries me now is the cost of petrol. It's costing me an absolute fortune to get to and from work every day. I get paid milage in work but not to and from work.

I only drive a 1.4 Clio. It's so much money that I'm considering getting another job or moving to Manchester.

There goes my sportscar :(

Don't the Brits have fixed rate mortgages? Why anyone gets an ARM that intends on not moving boggles my mind....

It's a bastard that how well off you end up can be down to being born just a couple of years earlier or later.

I did ok in the early 90's and therefore on my feet now and not worried too much about what may come in the next few years.

I qualified from my Apprentiship at Christmas 1990 so my wages shot up. Had to work permenent Nights too so was getting paid time and a half on top of that.

Within 18 months I had over 10K for a deposit and there were hundreds of Repossessions on the market.

My house was £52500 but the Building Societies still couldn't give places away so were offering an 80%/20% shared equity deal for 5 years. Basically meant I got a £42K mortgage and didn't need to pay any deposit. The house was then to be valued after 5 years and I had to pay 20% of that. If prices had risen I would have owed more than the £10500 that 20% was worth when I bought it, but my equity would gone up so I'd have just borrowed against that. The only gamble was if the value dropped, I took the whole hit and still owed £10500. But I had that money sitting in tax free investments over the 5 years and wasn't planning to move any time so wasn't worried.

The value went down over the first few years but by 1996 property had started to recover and at the end of the 5 year equity deal my place was worth £52K again. I paid the £10500, pocketed a couple of grand from the investments and was left with only an 80% mortgage.

Lend us a tenner

You probably deserve a tenner for reading it all. I nearly fell asleep typing it out

GlasVegas wrote: I was living at home being a stoodent so was completely oblivious to it. My ma had just gone back to full-time work in 1990 after 6 years off to drop my three wee sisters in quick succession so I s'pose there would've been more money coming into the house than there had been for years despite the recession.

The whole negative equity thing is pretty much a non-issue up here. The house price to earnings ratio has always been within reasonable boundaries (think it's currently circa 4.5 in Glasgow compared with over 8 in the South East) which means there's none of these over inflated "bubble" prices that burst during times like now. Prices in the West of Scotland actually rose by 2% in the last quarter and are expected to grow by 4% over the next twelve months.

If you've got a bit of cash lying spare or you can re-mortgage at a reasonable rate (not easy, I know!) now is a great time to buy. Loads of distressed sellers out there panic selling at below market value. I've been filling my boots that last few months with a few buy-to-let bargains.

That said I bought a Hovis loaf out of Somerfield today and it cost me £1.43!!!!!!! Only noticed when I checked my receipt. Am I dreaming or was a loaf of bread not less than a quid about a year ago?? Somerfield's own brand from now on.

I have up on bread at New Year when it was £1.14 in Sainsburys in town.

Negative equity is only an issue for those people who were complacent enough to believe that the property boom would just carry on. My ex boss took out 110% with Northern Rock just before Christmas (which I did for her) and now both her and her partner are redundant so she's fucked. The fact is, its a near miracle that the property boom carried on as long as it did, but its not sustainable over a the long term, because, you pretty much end up pricing lots of people out of the market.

Laat year, I had a fairly decent job, with a fairly decent wage. Now, if I wanted to buy, (which i didnt, and dont want to, barring a massive change in my circumstances, for at least another ten years) it was near enough impossible. I was offered a house opposite my grans in Clayton for 55k, which needed a phenonemenal amount of work doing to it. Which i just didnt have the time for. But to get somewhere decent, in a reasonable area, it would have been at least 100k, which I probably could have squeezed on a mortgage at the time. Now, it would be impossible.

Of course, the other problem is (and no has has really mentioned this, which is surprising) is the Buy to Let makret. My uncle did this, and got out when the going was good. House goes on the market, and it was snapped up by a property developer to rent out to students or immigrants or whoever, mainly becuase they were able to offer say 5k more on a property than mr an dmrs first time buyer. So that again creates an artificial rise in overall property value. So people cant get on the housing market, those that can overpay, those who use it as an investment then dop up a property which they cant sell, and if they do its at a loss, and all of a sudden there is no confidence is the housing/property market so no one wants to secure money against it and bubble bursts.

And yet people still blame the government, when in reality its pretty much out of their control.

What are the rates like for re mortgaging? I cant imagine it being that difficult with the Abbey who lend their own money out. Even in my last week in mortgages in january i had no problem doing stuff with them.

Adn now everyone can go to sleep.

Seen as though your asking Liam,I've just secured a 5.62% on a 104,000 mortgage from the Abbey,and it has been a total fuck on for 5 months,but I finally secured that rate for 3 years,which is no longer available anywhere..I was with Norhern Rock on their fucking cheeky cunt rate,getting well and truely shafted at 7.09% previously,for those five months...I hate the Abbey for taking ages,and it became pretty obvious Northern Rock were bailing out of the mortgage market as a competitive option..Testing times.

When i started at my old job, Northern Rock came in and spent hours boring the arse off me with all these productsm and all these things that mortgages do, and at the end I just sat there and said: "well,. thats all very well and good, but your, .5% more expensive than Abbey, So i cant see when my customers are going to want to use you"

The only Northern Rock mortgage I ever did was for my boss. On her insistence.

I presume it dragged on because they kept asking for more stuff, like six months payslips instead of three, bank statements. And probably something to do with the ex? If it was me I wouldnt be complaining at 5.62%.

Not complaining at a 5.62 in todays market,but they have tried to wriggle out of it.Like I said,it's been a twisty one with several annoying fuck ups..5 months to complete,if it completes this coming monday.

As for Northern Rock,I had a cheap as chips 3.75% fixed with them for five years.Brilliant.Them days are gone.

Boatraceface wrote: Not complaining at a 5.62 in todays market,but they have tried to wriggle out of it.Like I said,it's been a twisty one with several annoying fuck ups..5 months to complete,if it completes this coming monday.

As for Northern Rock,I had a cheap as chips 3.75% fixed with them for five years.Brilliant.Them days are gone.

Why only a 5 year fixed? Why not a 15 or 30 year fixed rate loan... don't they have those there? Why go through the hassle and uncertainty of adjustable rate mortgages? I just don't get it??

Uncle Liam wrote:

Of course, the other problem is (and no has has really mentioned this, which is surprising) is the Buy to Let makret. My uncle did this, and got out when the going was good. House goes on the market, and it was snapped up by a property developer to rent out to students or immigrants or whoever, mainly becuase they were able to offer say 5k more on a property than mr an dmrs first time buyer. So that again creates an artificial rise in overall property value. So people cant get on the housing market, those that can overpay, those who use it as an investment then dop up a property which they cant sell, and if they do its at a loss, and all of a sudden there is no confidence is the housing/property market so no one wants to secure money against it and bubble bursts.

You've used a lot of words to make one very valid point....if you're viewing property purely as an investment, don't buy where there's a 'bubble i.e. where the house price to local earnings ratio is higher than 5.

If you start off from this premise and DO YOUR HOMEWORK then property is and always will be a phenomenal investment. Long term it will out-perform the stock market, yer pension and any long term investment vehicles you care to mention by a significant ratio.

If you buy in the right areas, leverage well and remortgage when the rates are favourable you can build up a solid, well performing portfolio for very little personal investment. If you buy off-plan flats in UK city centre locations with 100% mortgages and rental yields of 3% you'll be bust within a couple of years.

For the less risk averse there's even bigger opportunities out in Eastern Europe. I'm just about to complete on a one bedder bang in the middle of Bratislava with a 90% mortgage deal at 5.4%. Capital appreciation predicted at 25% over the next twelve months. Was close to buying an off-plan two bedder in Tirana for 40,000 EUR but shat out of it at the last minute!!

El Jarvo wrote:

EdelBrock wrote:

Boatraceface wrote: Not complaining at a 5.62 in todays market,but they have tried to wriggle out of it.Like I said,it's been a twisty one with several annoying fuck ups..5 months to complete,if it completes this coming monday.

As for Northern Rock,I had a cheap as chips 3.75% fixed with them for five years.Brilliant.Them days are gone.

Why only a 5 year fixed? Why not a 15 or 30 year fixed rate loan... don't they have those there? Why go through the hassle and uncertainty of adjustable rate mortgages? I just don't get it??

What sort of interest rates are we talking about then, Stateside, long-term?

Very long-term deals are virtually unheard of over here, though do exist. Lad I work with was offerred 10 years fixed at 5.49% by Barclays recently. 10 years is a lot, by UK standards. But then, two summers ago you could've got (short term) fixed rate deals at 3.99% so you can see how it fluctuates.

I've got one mortgage fixed for five years at 4.99% which I've managed to port to a new property cos there was no way I could get a deal that good in the current market (well, in the market six months ago - would be worse now). To top that up (I was moving to a more expensive property) best I could get offerred by the same people was 2 years at 5.29% - so I've got two deals with the same people on the same property.

Interesting, seems like the banks have it in for you then?

The two most common fixed rates over here are 15 and 30 year loans. My house cost $250,000 and I have a 30 year, the interest rate is fixed at 5.1%. I did get it when the rates were unbelievably low, I think now they are going around 6.5%.... 15 year fixed rates have higher percentages, so it really pays off to get a 30 year fixed and pay more than they ask on the payments, to knock off the principle...

One of the reasons people are losing their houses so much over here is by using the ARM (adjustable rate mortgage), they started off at 3-4% and bought a home bigger than they could afford, the rate ends after 5 years and the rate shot up to 7-8%. I think there are at least 40 homes that have been foreclosed on in my neighborhood due to this...

I wonder if 1992-93 was when the economic bubble burst in Japan (while I was living there).