to want to literally throttle people saying "5% is nothing, interest rates used to be 13%" etc etc

[XCTX]

Yes, yes they did. But there is NO context here and also no comparison

interest rates were 13% at a time when the average house price was 60k and cost 4.5x the average salary.

The average house price is now 284k or so, and is c.7.6x the average salary.

People are coming off fixes and suddenly seeing their mortgages increase by 40, 50% and it is infuriating me that some are minimising this problem by comparing one finite moment in time with no context.

[onitlikeacarbonnet]

… what they planned. And we’ve not heard the worst yet.

[Explaintome]

@LetMeSpeak

i can’t believe boomers actually believe that our generation is having it equally as hard as they had it. It’s actually shocking and so tiring at this point.

Actually I think it's equally insulting that people going through this now want to insist that order people had it easy. Yes, on the whole their lives may be easier now, but we watched our friends losing their homes on a weekly basis in the early 90s and felt like we were only ever a week away from it. People were forced to sell their homes for half what they paid for it to avoid repossession.

Things worked out OK, in the end, for most people (although there was a spike in suicides at that time too) but bugger me, they were properly tough times.

That doesn't mean that I can't see now is hard for young people, but don't dismiss our experiences either.

[MissWired]

Historical average interest rates in the UK = 5-6%.

It's almost as though nearly twenty years of stupidly low interest rates has led to a huge and unsustainable house price bubble which nearly collapsed the UK's financial system in 2008 and looks set to do so again in 2022/3.

Only this time there will be no bailouts for banks as the printy printy machine no longer works because the IMF just pulled its plug out of the wall.

Or something.

[Bogofftosomewherehot]

@newstart1234

In the 80's scenario within my own family that I'm referring to it was in an area of high social deprivation, hadn't been decorated in 20 years and no central heating (but that was pretty standard in the 70's and was a hang over from that time). Hardly palatial luxury - so I'd say you've made assumptions when you know nothing.

[Bogofftosomewherehot]

@ThatsNotMyMuffin

Get over your pearl clutching!! 😂

Based on your mid 80's figures.....
Your PiL's earnt more than double national average wage - £20+K each.
Joint take home approx £3K+ per month.
You say their mortgage was £300pm and they couldn't afford that!!!😮


£300 mortgage at 15% indicates a house purchased for £23K.
National average house price mid 80's - £31k.
Household income £40k pa.

Something doesn't add up. Either your figures are wrong, PiL's lied about their salaries or your PiL's lived a serious lifestyle of drink drugs and debauchery back in the 80's. The latter is my favourite option!😁😈

[newstart1234]

I was talking about my own family, not yours :)

[Eeksteek]

@TarasHarp55

I think that people losing their homes is what they want. I'm not saying it's engineered but the government must know what will happen. My dd said it's all about the "great reset".

I don’t know about the great reset, but there has been a huge backlash against landlords, which for a long time I couldn’t understand. Surely slum-landlording would be in the best traditions of the Tory party, to be rewarded, not taxed? Only when you dig deeper, it’s individuals being scapegoated. Companies have different rules. And the likes of JRM don’t own their businesses in their personal names, do they? Win-win, then. The get to look like they are cracking down on landlords, which is popular with the electorate, while still hoarding their piles of cash by incorporating their portfolios.

So a housing market crash and a lot of repossessions wouldn’t be at all bad for them then, would it? Big companies, pick up lots of properties, nice and cheap, ready to rent back to the homeless at fat profits. Looks like there were too many plebs benefitting from cheap buy to let mortgages and getting too big a share of the rental market. That needs to be back in the hands of the 1%, where it rightfully belongs. Gods, it’s reprehensible.

[DrinkFeckArseBrick]

Yabu for wanting to 'literally' throttle someone

[fairfat40]

Yes it’s annoying because it’s dismissive.

but people did lose their homes in the early 90s. My mum helped us keep ours.

the single dad in the flat downstairs from us lost his home. It was heartbreaking.

[BetterFuture1985]

@XCTX

Yes, yes they did. But there is NO context here and also no comparison

interest rates were 13% at a time when the average house price was 60k and cost 4.5x the average salary.

The average house price is now 284k or so, and is c.7.6x the average salary.

People are coming off fixes and suddenly seeing their mortgages increase by 40, 50% and it is infuriating me that some are minimising this problem by comparing one finite moment in time with no context.

There are a lot of financially illiterate older people in the UK who managed to buy and pay off a mortgage through dumb luck rather than any financial savvy. Unfortunately they don't understand basic concepts like exponential growth and their memories are also absolutely shocking. They also fail to realise that some very simple mathematical calculations can be performed to demonstrate why their arguments are absolute rubbish. Allow me to demonstrate some of these.

In 1991 the average wage was about £17k a year and the average house price was £55k. Contrary to the lies/misremembering that you might hear from people who were mortgage holders at the time interest rates between 1991 and today have only exceeded 10% for one day. That was the 16 September 1992, Black Wednesday. Interest rates rose to 12% that day and the Government did tell the markets that they would rise to 15% although that never happened. The next day interest rates returned to 10%.

If that house for £55k had risen in line with wages, it would now be worth £110k. If you had a 100% mortgage on that house of £110k with 10% interest over 25 years the payment would be exactly £1k a month. If the interest was 15%, the payment would be £1,409.

The average house price today is in fact £286,397. A 100% mortgage on that house with 10% interest would now cost you £2,602 a month. With a 15% interest rate it would be £3,668. That's 160% more than in 1992 adjusted for inflation.

In fact, to pay the same as you would have done on a 15% interest rate in 1992, interest rates would only have to rise to 3.335%. Interest rates would have to fall to 0.37% to allow mortgage holders to pay the same as in 1992 on a 10% interest rate. Obviously I'm ignoring the amount above base rate that the banks charged then and now on the assumption that these would be similar.

Unfortunately though I think most of us have parents and in laws rubbing their hands in glee at having their cake (and high house price when they downsized) and eating it (higher interest rates on their savings) and would rather play "blame the victim" than take a good hard look in the mirror and wonder when it was they decided another cruise holiday was more important than their families.

[Blossomtoes]

Contrary to the lies/misremembering that you might hear from people who were mortgage holders at the time interest rates between 1991 and today have only exceeded 10% for one day. That was the 16 September 1992, Black Wednesday

Utter bollocks, as the link below shows.

www.propertyinvestmentproject.co.uk/property-statistics/uk-interest-rate-history-graph/

[TimeFlysWhenYoureHavingRum]

Yanbu. The other old chestnut (usually from the same people) is "too many people have overstretched themselves".
No - that's what properties cost these days. What do they expect people to do????

[WonkasBooboofixer]

Our mortgage company stress tested our finances to 10% before approving our mortgage in 2015 surely anyone getting a mortgage since then has had the same.

[floorida]

Alongside huge increases in energy bills & food bills? unlikely

[Appleandoranges]

without doubt younger generation has it worse overall as house prices are so much more unaffordable compared to wages. However in the early 1990s unemployment was much higher almost 10 per cent maybe. And it was the combination of unemployment with high interest rates which led to repossessions. Hopefully we won’t get such high unemployment this time round. Losing job and not being able to get another obviously the most stressful thing.

[BetterFuture1985]

@Blossomtoes

Contrary to the lies/misremembering that you might hear from people who were mortgage holders at the time interest rates between 1991 and today have only exceeded 10% for one day. That was the 16 September 1992, Black Wednesday

Utter bollocks, as the link below shows.

www.propertyinvestmentproject.co.uk/property-statistics/uk-interest-rate-history-graph/

I beg your pardon, I was 6 months out. The rest still stands.

[Blossomtoes]

@BetterFuture1985

I beg your pardon, I was 6 months out. The rest still stands.

Either you can’t read a simple graph or you’re incapable of understanding it. Either way, nothing you say has any credibility whatsoever.

[Geewhizzr]

Absolutely would never say that. We had a first mortgage in the 80s . BUT our joint income was 24 k and the mortage 18k . ( cheapest house in a rough area). I wd be happy if house prices went down in general so that people cd get on the ladder.

[Justanotherlurker]

One thiing has been long forgotton is that House prices could rice and fall, what a lot of people have ignored is the fall part, the banks fell overthemselves to prop up the market in 2008 and the can kicking excerise of lumping the crisis onto the future generation has been ignorned, we have had the other black swan situation, no side of the goverment would have solved the issue or even wanted to takle it, but YABU as it is what it is, the past couple of decades has been keeping a zombie system alive. I am sure you are the tyep of person that after a couple of years and a quick paint job and kitchen upgrade expected an increase in house price.

[entropynow]

@Explaintome

TBF the average weekly wage in 1982 was £154 and in 2022 it's £601, so in real terms £900 is less than £300 was then. Their payment was c. 50% of the average income. Yours was only 37%

It's still annoying, but times really were hard in the 80s and early 90s.

Quite. But that's not the narrative so you'd better hush and accept that everything was easy for all boomers and it's all our fault somehow. Because OP doesn't want facts, just finger pointing and rage.

[Justanotherlurker]

@entropynow

Quite. But that's not the narrative so you'd better hush and accept that everything was easy for all boomers and it's all our fault somehow. Because OP doesn't want facts, just finger pointing and rage.

Simply trying to blame the boomers is idiotic, it wasn't the boomers who thought house prices would keep increasing, it is labour and conservative govs who have tried to make sure your inherritence is something you can bank on.

To many people have been watching homes under the hammer and not realising how brokem the situation is

[Porcupineintherough]

@Explaintome

Also, when interest rates went so high very many people lost their homes and thousands more were trapped in negative equity.

People were literally handing their keys back to the bank.

So it's not like interest rates were high and everything was fine. There were on average 67500 repossessions in the years 1991-1993 and they were around 50000 in the years before and after that. For context, there were 4580 in 2019.

This^^. I can remember my boss breaking down and crying at work when yet another hike was broadcast on the news. And repossessions were huge.

[Kabalagala]

Why do we need all the competitive misery!
For God's sake all we've heard for years is hurry up and buy, get on the ladder. Now we're on the ladder and all we're hearing is why did you over pay, why did you stretch yourselves, you're silly to think interest rates would always be so low....
It is really bananas to me how quickly the narrative has changed from the older generations

[Theluggage15]

@BetterFuture1985 what on earth are you talking about? Don’t you understand basic graphs?

[Elphame]

@Gazelda

I hear you. And of course you're right.

However I'm sick of people dismissing those who lived through the 15% interest rate era. It was shit. Really shit. Terrifying.

We couldn't afford a car, phone or video player. I sometimes had to walk 5 miles to work because I didn't have bus fare.

We were trapped in negative equity. Had no choice but to find the money or have our homes repossessed and still owe the money.

I'm not denying it's terrifying for many now. And if I were a young person I'd be feeling hopeless.

But don't take it out on boomers or those who had mortgages through the 80s/90s. Most of us have huge empathy and would do anything we could to make things easier for the next generations.

Yes indeed. We were on a knife edge for a couple of months even though I was working for a mortgage broker and was able to fix for two years at 11.75% so we avoided the worst of it.

Two young children and no free childcare - all was paid for from taxed income and I've never forgiven a certain politician who told me that help with childcare costs was unnecessary as women only worked for pin money.

Each generation faces its own problems.