Do you remember what it was like during the 2008 crisis?

[bushproblems]

I’ve seen a few comparisons of today’s economical situation and the 2008 crash. I was in high school at the time so heard a lot about “the credit crunch” but didnt really know what it meant.

Are we in a worse or better position job wise, cost of living etc than my parents were? How were you affected?

Im at risk of redundancy so I’m freaking out about the job market and the astronomical cost of basically being alive!

Lots and lots of people were made redundant.

Unlike previous recessions unemployment wasn’t high. But the legacy was wage stagnation.

Ultra low interest rates inflated assets particularly housing & allowed many “zombie”
businesses to survive

We never recovered from it.

I don't remember being impacted at all or knowing anyone who lost their job. We had four young kids between the ages of 3 and 10. I don't remember our mortgage going up or anything ! Life just carried on the same.

Inflation has gone up since the end of Sunak government (2.3% on day election was called), interest rates are not set by government and they have come down because BoE had no choice - the economy has not been able to grow more than 0.1% under high interest rates. No idea why they raised them so high in the first place when inflation was high due to external factors.

Migration has dropped due to a combination of Tory and Labour policies introduced first by Sunak, then Starmer.

Triple lock is unaffordable and will eventually have to go.

This Labour government has not achieved anything like what you are suggesting it has. Unemployment is at a highest point in ten years.

Where is our economic growth promised repeatedly by Starmer during election campaign?

Without it, we are screwed.

A good friend of mine was about to complete on a very expensive apartment in Madrid, she lost her job in banking and had to pull out of the sale. Three years later she bought an apartment in the same building, it was slightly bigger and two floors higher for 200k less than the original apartment. Just crazy amounts of money

This feels much more fundamental - there is a permanent change in the employer / employee relationship and not in a good way

It is more of a shift because we kicked the can down the road & have run out of road. This is against the backdrop of a lack of investment by business & government into employees, public services etc. And we have the demographic shift, we are pretty fucked!

I doubt they could cope with the cognitive dissonance.

Without it, we are screwed.

Its highly unlikely after nearly 20 years of low productivity & growth that things will change particularly when you factor in the state of everything.

Remember it well. We got married and bought our first home. Literally the week after we lost 100k on our house. It really really Kept us on the back foot for years as we were in negative equity for such a long time, so while our other friends lived in huge 4 bedroom detached houses we were stuck in our 2 bedroom tiny terrace house that we basically paid the same money for lol.

Yep this.

Triple lock is unaffordable and will eventually have to go

Absolutely but with a population that’s older they wont vote against their interests.

Your mortgage is unlikely to have gone up! It would have plummeted - if you were in a tracker. VAT went up but if you were on 5.7% you would have got on to your broker and paid an exit fee and had half the payment of your mortgage and not given a shit about VAT.

if you had a job and a mortgage, while it was worrying, if you kept your job, and just dialled back, you were ok. QE which is a terrible idea and redundancies were the frightening bit. And renting. Rent didn’t go down and the job market sucked.

but you wouldn’t have felt the mortgage go up. That’s Liz Truss’s legacy for sudden frights.

Redundancy for me, and a spell of unemployment.

My first child was born in Sept 2008. Thr headline on the newspaper DH bought that day said “Global Economy in Freefall”.

A month later DH was put on notice of redundancy.

It was a scary time to have a newborn.

DH was actually made redundant 3 years later, the day he went back to work after our second child was born.

Yes I remember it. Housing market was badly affected with UK house prices falling 16% that year, caused by credit conditions tightening a lot and it had been a bit of a frenzy in the housing market just before that. I had anticipated that so had sold my flat just before for almost 4 times what I paid and we had gone into rental with the money split between savings accounts.

£35k was in Icesave which went down but it was covered half by the Financial Services Compensation scheme and in theory half from Iceland. Iceland did not pay out but the FCSC did and I got the £35k back and 6% interest which Icesave had promised. I felt very lucky to have got it back and was amazed they paid the interest as it was clearly an unviable rate. I used the interest to pay for a 2 week holiday in Cape Town and saw the penguins on the beach. Workwise I was in the public sector so safe from job cuts though we did get a 1% payrise limit and job cuts came later in 2011 or so but with very generous terms (unless local authority).

In hindsight we probably benefitted from it, but it was hard and the recovery took a very long time.
In 2008 before crash we were mid20s thinking about getting married and it was looking as if we could never afford to own a home. By 2010 prices had dropped low enough for us to get a small house in our preferred area. In 2012 we were both made redundant and were out of work for 6m+ each. We ended up in different careers after retraining during this time.
I am praying we'll pay off the mortgage before the next recession hits.

I was 19 ish at the time.

from what I remember of it -

we had just bought our first house. When we went to the mortgage broker he had looked at the deals and laughed, saying someone had offered us 400k saying that was ridiculous you would never pay it back.

he was right I was a nursery nurse pt and husband worked in a supermarket.

in the end we borrowed 115k , costing £615 per month. When you think that hubbys wage was £850 I can’t believe it was allowed to happen. That was July time. When we signed for the contract the ea said we were lucky as lots of deals had been pulled the day before.

we moved in and everyone started talking about rates going up, and being repossessed. We had a two year fix and where kids ourselves so didn’t really pay any attention.

then the Christmas time next door sold …. For 64k

then we were a little bit worried for quite a while… but rent on a house our size would have been nearly the same so we just justified it like that and carried on.

about a year later we tried to remortgage when our deal ended, and no one would lend to us. Except Halifax who offered us a maximum of 25k

we where mortgage prisoners (I think that’s the term) for nearly 10 years. We couldn’t remortgage because we didn’t earn enough, and couldn’t sell as we would have ended up owing thousands.

however , this was when the base rate hit 0 ish for ten years? Or a long time anyway. And our payments went down to £340 for that time. Our only option was to not think about it, because we truly had no option 🤷‍♂️

our house is currently worth about £140k today , which you can’t really believe in the 20 years a house hasn’t really gained in value.

basically we bought at the wrong time, however if we hadn’t bought then , it’s likely we never would have done.

I think it’s all worked out really- but we definitely haven’t made money in property!

if we had lost our jobs or split up we would’ve gone bankrupt

My husband and I both lost our jobs, although there was a delay/staggered start to the redundancy process between us. We got stuck in slightly unsuitable accommodation for 7 years due to the way the property market was. We both didnt get a payrise (once we had new jobs) until the recent period of inflation, so we felt very affected by wage stagnation when compared to the years running up to 2008.

I think the economy you launch into adult life has lifelong impacts. im sure there's stats around cohorts that graduate into a recession never catch up as a cohort (obviously plenty of individuals do brilliantly). I think the huge lack of entry jobs now is harsh and the size of deposit/mortgage harsh.

Although I am amused by my 18 year old asking me questions about 'my day'. Im still here, I still have to feed my family and pay my mortgage and hold down a job. Im not immune from the economic situation.

Recovery was relatively slow worldwide. Britain then put itself in a much worse position compared to other nations with the austerity measures introduced in 2010 and the economic suicide that was Brexit. Chronic underfunding of health and emergency response services which had gone on for decades and accelerated even more in the 2010s, meant we were woefully unprepared for the Covid pandemic.

I had just finished a course and was looking at the Civil Service and then everything just stopped in terms of recruitment. I don’t think the country has recovered.

There may have good financial reasons for saving the banks (and a lot of individuals were actually made redundant)
I remember the anger at “bailouts” for the banks when people looked bank at other recessions that affected different sectors and regions (mining, steel, shipbuilding) and the feeling that it was one rule for the rich and powerful and another for ordinary people affected by recessions in the 80s

We bought a business in 2006 so pretty bad timing. We went from quite affluent to living on credit cards. Limped on for another 10 years because my EXH refused to believe the accounts.

You want to talk about financial crisis? Look at the 80s and early 90s. I remember going into the bank to draw out 50p so I could at least buy a loaf of bread. Not joking.

Incredibly frustrating times. Big business wanted the benefits of casino capitalism but expected bailouts when it bit them back. They should have been left to fail, with governments picking up the fire sale remnants. It would have required emergency legislation (eg banning foreclosure moves against borrowers not in default, and prioritising consumer deposit-holders over corporate debtors), and would have temporarily upended the economy, but imposed the pain where it was deserved. And grown back different but stronger. I will never forgive them.

The causes of low productivity and growth are not unknown. It will take a bold government to do something to move us in a different direction. It has happened before, it can happen again.

Yes I remember the early nineties being much harder. I had friends who lost their home and everything in it and ended up in a cruddy cheap bedsit. I was sofa surfing because I couldn't get a stable enough job to rent. It's always made me very cautious about my finances.

I was extremely ill in 2006-7 and had already cut back on everything to save as much money as possible because I was unable to work, so the crash in 2008 didn't hit us as hard as it might have done if I had been having a normal life. I was pretty much housebound so it wasn't like I had to cut back on social life as I didn't have any 🙄

@TeenagersAngst when has it happened before with our current demographics?

That high risk benefitted the gov too, they rode politically on the good times and boom, before the bust.