To think a recession is looming?

[GrannyBloomers]

I was quoted £2 a litre for heating oil. £1000 for 500 litres, a matter of weeks ago it was roughly a quarter of the price.

Energy bills set to be £3k per annum - potentially more when a new price cap comes in in October.

Diesel near me is 171p and rising.

I'm in a 3 bed semi, nothing special. I need at least 1500 litres of oil a year (it runs the hot water too). That's say £3k. No gas but electric. I'm doing ok with cutting use = £1.5k per annum.

That's 4.5k at todays prices for household power. What will it be in October - 6k, 9k more?

This is before other costs increase - food will go up when the cost of storing it (refridgeration etc uses energy) and transport also increase.

If all the average person's income is spent on rent/mortgage/ bills and energy, then there's no money to spend on anything else. No eating out, no leisure, no holidays.

Surely a huge recession will follow.

And what if a much higher proportion of people need benefits?

No there wouldn’t. There wasn’t last time. There were lots of people being sick on their shoes every time the rate went up and lots of people losing their homes. History very sadly has a history of repeating itself.

Last times property wasn't so expensive though. The banks wouldn't be able to loose all that money, it would be mortgage extensions until people were 80 &/or switching to interest only.

If you are wanting to avoid gas, don't discount storage heaters.

Don't put too much emphasis on EPCs. They are outdated and don't make sense.

@lorking

I can't imagine interest rates in double figures, with the way house prices are there would be civil unrest

There wouldn’t because the British just roll over and accept whatever is dished out at us. We need to follow the lead of the French.

@oldandscunnered

Yet I work in conveyancing and am just as busy as ever. I don't get it, I thought things would have tailed off slightly but they haven't. I just don't know where some people get their money from.

Excess Savings from Pandemic.

Also, they reached 55 and got 25% tax free from pension pot

Lots of options.

And lots of inheritance money still sloshing around

Not only are you wrong @Bringsexyback but if a lender fails to recoup the full amount of the debt, the borrower still owes them the outstanding money. It happened a lot in the late 80s/early 90s.

It’s no good you calling those of us who are realists doom mongers. It’s much more unkind to tell people these things could never happen.

@FudgeSundae

Going against the grain here but… no, we’re not heading for recession. If anything, we’re heading for a massive boom with inflation going up significantly. That doesn’t mean it’s fun - anyone around in the 90s will tell you high inflation is unsettling and difficult - but it’s definitely not a recession. Recession means decline in productivity and employment - we’re seeing the opposite. Employment is at an all time high, wages are rising fast. Arguably prices (house and energy in particular) are rising faster but that’s not a recession.

I agree, and whilst demand outstrips supply in the property market there is unlikely to be a correction.

@Blossomtoes it absolutely did not happen late 80s and early 90s because I say I remember being an estate agent in 1994 at a property was advertised it was one of about three repossessions we had in the whole of Birmingham so not the enormous numbers that are people are trying to imply here. We received a cheeky offer something like 44,000 on our asking price of 47,000 and we were told no we could not except it by the Alliance & Leicester who were the sellers Because legally they had to re-coop as much of the owners money as possible

Look we are in a paradigm shift and it's going to hurt. A lot of us are not going to survive this. There will be civil unrest when people go hungry, and people will go hungry. I can't believe the ostriches on here with their heads in the sand! This is not doom and gloom fearmongering, it's already happening around us, if you choose not to see then so be it.

I'm rationing my remaining heating oil as much as I can. No heating on until DD comes back from school and then only for a short time.

I can't afford £1000 for 500 litres of oil. So there will be no hot water or central heating.

I was so much better off in the 80s!

Life as we have known it is over for the foreseeable future. We will have to accept a simpler, less comfortable life with less reliance on cars and fewer choices in the supermarkets. Eating out will become a luxury, ditto foreign holidays and 24 hour central heating.
I think I may have just described life in the 1950s/60s.

When our DC were younger and living at home we always flew by the seat of our pants financially - big credit card debt, overdraft, big mortgage - mostly due to school fees due to bad bullying in state school, but also a mini recession meaning our business suffered - we lost our house. I said to DH the other day if this looming situation we're in now had unfolded then, we would have sunk. We would be bankrupt. I feel so much for families who are really going to suffer. Hardworking families. How can it be the case that families with 2 incomes or even 1.5 incomes can't cover their basic bills? Something has gone very wrong and I think it's largely the property market, making mortgages and rents eye-watering for most. I sincerely hope the property market bubble bursts.

I also have more recent experience of family court/divorce proceedings where charge was trying to be put against our house, the former marital home, because the lender couldn’t produce the original signed paperwork the judge threw it out and wouldn’t let them collect the Debt. things have changed massively in the consumers favour since the early 90s.

I have recently applied for a mortgage myself and been told that the lender will go through everything with a fine tooth comb because if there is ever a hint that I could not afford that mortgage at the time when I took it out, again repossession just simply would not be allowed through the court. I would imagine that the same stress test has been applied to just about everybody that’s taken after mortgage since the new legislation came in 2008.

@Alleycat1

Life as we have known it is over for the foreseeable future. We will have to accept a simpler, less comfortable life with less reliance on cars and fewer choices in the supermarkets. Eating out will become a luxury, ditto foreign holidays and 24 hour central heating. I think I may have just described life in the 1950s/60s.

Yes, that was my upbringing in the 60s and 70s. No car, no meals out, no foreign travel, no central heating. It was normal then so what we didn't have we didn't miss.

it absolutely did not happen late 80s and early 90s because I say I remember being an estate agent in 1994 at a property was advertised it was one of about three repossessions we had in the whole of Birmingham so not the enormous numbers that are people are trying to imply here

It did happen. And in great numbers. When I bought in 1991 half the properties on the market were repossessions. It was the peak year with nearly 80,000 repossessions.

A recession is when money returns to he people it belongs to - often not the people with the '71 plate cars who zip off to Dubai every other month.
In the 90's, there was little sympathy (from official circles) for those with negative equity and people were treated very badly. Those most likely to find themselves in this position will be BTL landlords who regularly take equity out of a property and have a loss on disposal when CGT becomes due.
Huge reductions in Uni places will burn many BTL investors, unless Ukrainian refugees take their places.
Some leadership is required from Government, healthcare and education workers who kept going through lockdowns should have been given the money, MPs deserve to get the clap.

Well if as you claim it happened in 1991 by 1994 it was all over so in this day and age it would take them a lot longer than three years to get you out of your home if they want to repossess it.

Again personal experience of ex-husband not to paying the mortgage without my knowledge, two years without receiving a single payment and we weren’t even at the we’re going to take you to court stage letters from Santander.

More please Miss sexy could you please please make some sort of payment if it’s not too much of an inconvenience to you if you wouldn’t mind kindly thank you.

The tax on fuel is 57p per litre PLUS 20%.

The government could easily help ordinary people by taxing capital gains at the same rate as income but it won't because it's Tory.

A recession is avoidable but Boris will do what benefits his class and a recession will benefit them as they can ride it out and pick up assets at cut price as happens in every recession

[quote Bringsexyback]@Blossomtoes it absolutely did not happen late 80s and early 90s because I say I remember being an estate agent in 1994 at a property was advertised it was one of about three repossessions we had in the whole of Birmingham so not the enormous numbers that are people are trying to imply here. We received a cheeky offer something like 44,000 on our asking price of 47,000 and we were told no we could not except it by the Alliance & Leicester who were the sellers Because legally they had to re-coop as much of the owners money as possible[/quote]
You’re wrong on this I think the lenders have to get a fair market price. Which may be less than you’ve paid for it, if you are now in a recession. If that happens to be less than the mortgage it’s your hard luck and nothing you can do about it.

I've seen diesel at 199.9

@Bringsexyback

Well if as you claim it happened in 1991 by 1994 it was all over so in this day and age it would take them a lot longer than three years to get you out of your home if they want to repossess it. Again personal experience of ex-husband not to paying the mortgage without my knowledge, two years without receiving a single payment and we weren’t even at the we’re going to take you to court stage letters from Santander. More please Miss sexy could you please please make some sort of payment if it’s not too much of an inconvenience to you if you wouldn’t mind kindly thank you.

When house prices are continually rising, lenders couldn't care, you are racking up additional debt, which the increased value comfortably covers. I bought my house during the 'dead-cat bounce' in 1990 and despite having paid a 10% deposit and making all of my repayments was in negative equity for nearly ten years. In those circumstances, lenders were very aggressive - often selling the debt to people who didn't have a High Street name and reputation to protect.

Exactly that @ThroughThickAndThin01.

I think we’ll be ok in terms of paying the bills, but we’ll definitely need to cut back on life’s luxuries. Life’s luxuries are definitely important to the people providing the service. I’ve been saving to have my kitchen redone for 3 years, however I’m not sure I can afford now. It’s a shame for me, but also for the kitchen fitter and supplier. Really not a great situation.

Not sure of the legalities around repossession but when I bought my first house in 2002, it was a repossession. I was informed that the sellers (so the bank who had repossessed) had to get as much as they could for the property. A btl landlord had offered around asking price but as contracts hadn't been exchanged, I was able to view and offer slightly more.

I am very very worried re a looming recession tbh. We've already tightened our belts in response to gas, electric and diesel costs. Fortunately we have scope to tighten up more but consequently aren't putting as much back into the economy

I think we're in for super tough times.

I still do not see with the refugee crisis, with the lack of social housing, the government doing anything or allowing anything that would lead to mass homelessness of the indigenous population and if anybody finds in self in a situation where they are potentially falling behind in the mortgage payments, just pay something because then when you get in front of a judge, which you will, a human being will assess the situation and they don’t always come down on the side of the banks. As i say my ex-husband racked up a credit card bill and the judge just threw it out on a technicality.
Again anecdotally ive been looking at houses that are in the first time buyer price range, most of them have been Landlords trying to offload their by to let portfolio but when talking to the Estate Agents looking round they have assumed that I am Landlord and I’ve been told that the property I’m looking at is currently rented out for between 950 and £1000 a month. the mortgage on the property would be £500 and I have to pay expensive rates of 3.4% because I’ve only just started a new job, most people buying at the moment I would imagine would be offered 1.9% fixed for at least two years which would take that mortgage down to under £400 in month, well you could pay that if you were on the dole.
I do think there’s a few house price crashers on here living out their wet dreams that they’ve been hoping they’re going to come true since 2002 🙄