To wonder how we managed our mortgage when interest rates were 13.6%

[BlueBloodedBlue]

We bought our flat in 1990 with a mortgage rate of 13.6%

I know house prices were much lower but so were wages.

I'm obviously not minimising the current nightmare situation so many people are facing, I just don't really understand the economics so would be grateful if anyone is able to explain in simple terms please?

I just hate all the ' I'm alright Jack' people
The young have been screwed over. Much more than I and I'm old and lived through it all and not had a penny to my name
It's much harder for people now.
I feel sorry for the young of today to be honest :(

I earned 10k in 1989 and bought a flat for 28k, I just checked and the last time it sold was for 113k in 2020. I just had a quick look at what the current salary is for a similar trainee role and it’s 17k.

I remember lots of people losing their homes in that time period.

We bought our home for 62k in 1999. Next door which is exactly the same sold for almost 300k last year.

I managed by having a lodger for the first 8 years, having at least 2 jobs for the first 5, hardly ever having a holiday unless it was camping or sharing a cottage with friends and generally living like a pauper.

And almost everything in it was second-hand, including many of my clothes. I left home in 1975, moved into an unfurnished rental in 1976, and got my first new furniture in 1991. My first dining chairs came out of a skip!

@bellac11 I don't understand your point? I was talking about disposable income after housing costs.

I worry about my DS affording to buy a home , he is lucky that we don’t mind him staying at home, we have the space and we all get on but it is terrible for young people.,

@the80sweregreat I'm not young although I have dc, I think it's outrageous. How much shit are they going to have heaped upon them.

Yes so am I, what is it you dont understand

Wages were not better!
Age 22 in 1994, I earned £200 a week for 40 hours

I'm not sure it's fair to compare now to then. People now are accustomed to having a different standard of living. For example, when I moved into my house. I had no central heating for several years. I had a gas fire in my living room and that was the only heating in the house. I used to get changed for bed in front of the fire and then run upstairs and dive into bed with a hot water bottle. The house was freezing. But my friends were all the same so it didn't seem like I was hard done by. Obviously I had low energy bills because, honestly, we worried about those bills a lot then too.

Yes I had lodgers too when I bought my first place, didnt like it but needed to. Also worked overtime mornings, evenings and weekends for years and years.

We didn't manage. Our home was repossessed in the 90s just before the property price explosion. Left with a shortfall debt and we've never been able to afford to get back on the ladder.

@bellac11 you replied to my point that younger generations have less disposable income than previous generations because of housing with I think its unhelpful to pretend that spending habits have nothing to do with how financially stable someone is.

So I don't get your point, maybe someone else will!

The young also work hard too
It's not a competition to how hard people have it : they do these days because house prices are ridiculous too.

@boxybox I'm not sure I really understand either but I think @bellac11 means that people were essentially just better back in the day. Harder working, ready to make sacrifices. That sort of thing. That's why they could expect the luxury of a roof over their heads.

I earned £15k when we bought our first property for £38k in 1999. It sold recently for £200k. The pay for the same role I did then, now is £25k. Wages have gone up a bit. Properly has gone up a stupid amount.

Property!

Loan to interest rate affordability.

14% of 45k is nothing compared to 6% of 450k.

I'm at loss as to why anyone can't grasp this, UK maths teaching really is bad.

It’s all of these factors. We bought our first house in 1990, moved North to do it as we got it based on 3x one salary, mine.
Friends in the SE were losing their houses as they couldn’t make payments. Especially those who bought endowment mortgages and ended up with negative equity, or who bought at the top of their budget, then went into debt to furnish it beautifully.
I think that expectations of how we live have changed enormously, and it’s harder to make different choices to the masses.

@Shortjanet right, makes sense now! I mean no one works overtime now or has a lodger even 😆🙄

Martin Lewis tweeted this today: "Its calculated that UK interest rates at 3% would put as much pressure on household mortgages as when they were at 14% before - due to much increased size of borrowing and house prices inflation." - I'd like to see the research behind it, but I don't doubt the authenticity of the claim. And obviously we're looking at a lot more than 3% now thanks to Truss & Kama-Kwase's efforts.

I'm at loss as to why anyone can't grasp this, UK maths teaching really is bad.

😆

Even the lodgers have smart phones - madness! 😂

My point is that its become a bit of a trend to make jokes about avocados and netflix to dismiss that although things are harder now in terms of cost of living to say the 80s or 90s, it will make a difference if people dont check unnecessary spending.

Ive lived it unfortunately and literally lost thousands in thinking 'well it doesnt matter, I'll never be well off'

No I wouldnt have ever been 'well off' but I would have been better off than I am now if I'd been a bit more prudent. It worries me that there becomes a rebuttal and refusal to think about how to spend sensibly, too boring probably.

Was replying to @boxybox

Why are you talking bullshit about me?