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!

I took out a new mortgage in 2008, out of necessity as I bought my housemate out. Interest rate was fixed at 5% then shortly afterwards Interest rates plummeted and I was stuck with this high mortgage. Fixed rate ended in 2011 and it went from £550 to £200 overnight which was amazing!

I was made redundant in 2009 but found a new job quickly so was fine, actually quids in with my redundancy pay

I don't recall things being particularly tough but it was pre marriage and pre children so I only had myself to consider anyway

What do our current demographics have to
do with it?

@TeenagersAngst an ageing population means more money is spent on healthcare, pensions etc. And people tend to vote in their own interests.

why would you think demographics are irrelevant?!

They’re not irrelevant. But the idea that you can’t have growth because we need to spend money on healthcare doesn’t even make sense.

But you need to spend money, lots of money to encourage growth, money on infrastructure, education, housing. Where do you think the money comes from?

Look at how much we are just spending on debt interest! This all leaves less money.

My experience was similar to yours. Most of my friends graduated in 2008. There were stories of several people who had grad scheme jobs lined up in big banks and lost their job on their first day, but most people were ok. I graduated in 2009. Jobs in my field were harder to get than previously but everyone seemed to get one within a few months. We carried on going out and living life. We were in London, so it took a while for anyone to start buying property. My (public sector) salary is definitely much lower in real terms than it would have been in the past though.

For me what sticks in my mind most was how my commute was a visual representation of what was happening.

I lived in SE London and always got the same train to Cannon Street every morning, and in 2008 by the time I got on, I’d never get a seat except maybe the occasional Friday. By mid-2009 there were seats to spare every single day, sometimes even still by the final stop before London Bridge.

We bought our first home. Prices were at an all time high but interest rates were sky high and houses weren't moving. Everyone except my dad told us not to buy, that prices would plummet, we should wait.

We bought. Houses prices stagnated but certainly didn't plummet and 2 years later d to rise again. After 7 years we sold it for 140% more than we bought it for.

Do it wasn't all doom and gloom.

One thing that was awfully sad was that a large number of properties we viewed were repossessions.

I was oblivious. I left university in 2006, and got a job straight after. Bought a flat the following year. Met DH the year after that, etc etc. My flat lost a little value but nothing to write home about. No-one ok my circle was on obviously effected.

I came of age at that time but was never really impacted by it. I remember it was endlessly talked about, “credit crunch” sections in newspapers. I graduated in 2009, got a graduate traineeship and my career went from strength to strength. Didn’t impact my parents.

The main thing that stuck with me subconsciously was the belief getting a mortgage was almost impossible. For years and years with everything in the news, talks of huge deposits etc, avocado on toast, I genuinely thought it was out of reach for me. Then in my late 20s a friend told me about 95% LTV mortgages and the rest is history. Got our mortgage, remortgaged 2 years later comfortably at 85%, up sized a few years later and have been home owners ever since.

I do think the media can really exacerbate financial instability.

There needed to be some recalibration . I bought my first property in mid 2000s with a 105% mortgage. I miss the enthusiasm and positivity though

I suspect the biggest impact on me and my family (and most others) has been what followed really, austerity and the impact on public services, and wage stagnation. We weren’t immediately impacted but you can see life changed from that point.

The country desperately needs growth, unfortunately many nice things like the minimum wage and workers rights make it tough for businesses to be nimble. What would really help the economy is much lower taxes, corporate and personal.

There needed to be some recalibration . I bought my first property in mid 2000s with a 105% mortgage

So many people did really well out of those crazy deals.

My youngest was born that year, so most of what I remember is baby stuff! It didn't affect us job wise, but the house that we currently live in was sold to someone else just before the crash and when we bought it a few years later it was in negative equity.

I completely agree with you that the only way to grow the economy is through lower taxes. The problem is on how to fund this?

Increasing debt is not an option as Liz Truss and Rachel Reeves have found out the hard way. So that only leaves cutting public spending and no party is ever going to get elected on that as a manifesto promise.

Yes and then they dropped again. We bought 2017 and sold 2024. We lost £75k.

Yes, the housing market completely stagnated in my area from Brexit until Covid, the housing market was so sluggish around that time. I think people forget how much Brexit spooked a lot of the market.

Public spending is cut the bone already though is t it? So we’re in a catch 22 situation 😭

Brexit impacted London flats in particular, a lot of them haven’t increased in value since then. Obviously there are also the leasehold & cladding issues.

Increasing debt is not an option as Liz Truss and Rachel Reeves have found out the hard way. So that only leaves cutting public spending and no party is ever going to get elected on that as a manifesto promise.

Exactly

I was 25. We had a tracker mortgage for the first 2 years and it seemed to go up every month! So we fixed, just before the rate was cut drastically. Very annoying! The mortgage was always affordable, but we'd bought near the top of the market and were stuck in our flat for 12 years and sold it for £500 more than we paid, having done a lot of work to it. Wages were very stagnant and there weren't many jobs about. I was a marketing assistant started on £17k in 2007 was on £18500 nearly 3 years later. Felt like a millionaire when I got a new job on £21,500! I was able to save £400 per month on that wage towards my wedding think I saved 6 grand for it. I spent my 20s being quite careful with money. I would have liked to have had more holidays I think but I wouldn't be in the position I'm in now.
It's the lack of wage growth and career opportunities that was crap, by the time things were improving I was looking to have kids so it wasn't a good time for me to switch jobs, so I didn't get any salary bumps that I could have if I'd made a few moves. Hindsight is 20/20 though the very slightly enhanced maternity pay was so not worth it!

It was bad, the 2008 crash led to the London riots and looting of 2011.
Worse than it is now.

2008 would not have been as bad as it was if it had not come on the heels of the dot.com bubble burst at Y2K and after the depression of the early-mid 1990s.

Graduated in mid 1990s and it took forever to find a job, unemployment was double what it is now. Started saving into a pension and for a house only for it to halve in value during the dot.com bust in 2001. That recovered and then crashed again in 2004, losing 1/3rd its value. Then it really took off, but crashed hugely in 2008 losing half its value again, and this time hit housing values as well after we had just bought our first house in 2005. We also had nursery age children by then. 2009 lots of redundancies, interest base rates were slashed from 5% to 0.5% so suddenly any savings we had were losing value because actual inflation was higher. By 2011 lots of those who couldn’t find work were desperate so we had the riots and looting. Then just as we started recovering the country goes and shoots itself in the foot with Brexit.

Its not been the best of times,

Well some on the left will argue that taxes can go up - loopholes, on the rich etc but basically anyone but them.

Whilst some on the right will argue that spending can be cut - government waste, foreign aid etc but basically any service that they aren't benefiting from.

Which leaves us with the default option of carrying on in a managed slow economic decline.

I think it will get worse before it gets better.
The economy needs investment to improve.
Which means public debt on things like infrastructure where there will be a return of investment in the long run through job creation.
Cutting public services is exactly what is making the economy worse.