UK Gross Mtge Lending Eases To GBP10.3B In May - CML

Graham_Devon

ad9898 wrote: »

Its amazing when you look at those rates and think that even though the lowest bank rate is 21x what it is now, house prices didn't crash with anything like the speed they have done so far. Food for thought for our over-valued, over-leveraged housing market.

I'm looking at them and thinking hmmm, tasty amount of interest on my savings there!

Thrugelmir

StevieJ wrote: »

Or the fact that their SVR is so low

Average SVR is around 4.64% currently.

and rising........

Graham_Devon

chucky wrote: »

you forgot to add that the salary multpliers were much lower and mortgage amounts were lower too, so repayments were easier to maintain..

you also forgot to mention that comparing recession to recession there were more reposessions then than now, even with there being more owner occupiers now.

i'm sure you were going to add these points weren't you

You sir, forgot to add we aint yet out of this recession!

Ok, I will admit, on a technicality we may be very soon, but again, your comparing a done and dusted recession with hindsight with one we don't actually know how far through we are

Generali

lemonjelly wrote: »

Oh go on, do tell!

Along similar lines, as a whipper snapper, could someone outline for me the speed/level at which interest rates climed in or around the "crashes"/recessions of the 70's/80's/90's if they'd be so kind?

Ok, just one more story now children then it's time for bed or the Socialist will get you. They just love eating up little boys and girls who are up after bed time.

Interest rates rose to around 10% after the oil crises of 1973 & 1974 - that happened when the Arab nations decided not to sell oil any more to the US (and others?). Rapidly rising oil prices caused a recession coupled with high inflation and those coupled with a major strike by miners, steelworkers and railwaymen led to a Labour victory.

Labour embarked on series of policies that were in retrospect disastrous. Any failing large engineering company was nationalised, interest rates were kept lower than was practical given rising inflation, trade unions were given more and more power and the bills were meant to be paid by taxing the rich at marginal rates in excess of 90%.

It led to disaster. Talented British people left the UK for the US and the English-speaking Antipodean coutries (the 'Brain Drain'). Then in late 1975, bond market investors decided that they were no longer prepared to pay for Labour's largesse and by early 1976 it was clear that the bills couldn't be met and the IMF was called in. Interest rates rose from 9% in March '76 to 15% in October.

Wilson (and later Callaghan) tried to impose wage restraint on the public sector to try to control inflation by a means other than increasing interest rates. The result was something that closely resembled a General Strike in the 'Winter of Discontent' in 1978-9. Even the gravediggers went on strike so people couldn't have funerals for the departed!

This huge mess led to the election of the unlikely (at the time) figure of Margret Thatcher who went on to become the longest serving PM of the period after universal suffrage was introduced.

Geoffrey Howe as her Chancellor increased interest rates to 17% in the period 1979-80 and kept them around 13-15% until the Spring of 1982. This period also coincided with very large numbers of factories, shipyards etc closing in the North of England.

Many people from those areas believe that the policy aim was to drive them out of business. My belief is that the necessary removal of subsidies either from the firms concerned or from the companies they were supplying led to the massive levels of businesses closing and mass unemployment.

Interest rates then fell pretty much in a straight line until the mid 80s when the stabilised at about 9-11% before falling to a low of about 8% in 1988 before rising steeply to try to reduce inflation (and later to keep the Pound at a steady level WRT the DEM as per my previous post).

'Night-'night

chucky

Graham_Devon wrote: »

You sir, forgot to add we aint yet out of this recession!

Ok, I will admit, on a technicality we may be very soon, but again, your comparing a done and dusted recession with hindsight with one we don't actually know how far through we are

agreed and when comparing like for like - year to year, repossessions are less now.

as for coming out of recession - it doesn't mean much really.
there's a long way to go for the whole picture to be 'normal'

Thrugelmir

lemonjelly wrote: »

Oh go on, do tell!

Along similar lines, as a whipper snapper, could someone outline for me the speed/level at which interest rates climed in or around the "crashes"/recessions of the 70's/80's/90's if they'd be so kind?

In the early 80's. After a couple of months in our first flat. Interest rates rose by 1% for 4 consecutive months causing our mortgage to rise from 10% to 14%. As FTB's we had little option but to literally count the pennies. We had everything budgeted out. I still remember walking round Sainsburys with a calculator to do the weekly shopping.

Thrugelmir

chucky wrote: »

you're right about the 15% another MSE urban myth
here are the BOE rates for that period

1991 Sep 10.50
1991 Jul 11.00
1991 May 11.50
1991 Apr 12.00
1991 Mar 12.50
1991 Feb 13.00
1990 Oct 14.00
1989 May 14.00
1989 Nov 13.00
1989 Aug 12.00
1989 Jul 10.50

and mortgage rates were 2% above BOE base.... Property Loans ( now BTL were 3.5% above base).

ad9898_3

chucky wrote: »

you forgot to add that the salary multpliers were much lower and mortgage amounts were lower too, so repayments were easier to maintain..

Took the words out of my mouth, that's how it always should have been, then we could have helped avoid the mess, just think where we could have been if people didn't take out 6,7,8x salary mortgages, or if they didn't buy a house by borrowing 4x joint salaries, only for it to turn into a 8x salary when one of them fell ill, accident, redundant, split up.....etc...

I mean the last ridiculous offer I was saw, was a website that you could meet strangers on and buy a house together, or buy with a bunch of your mates, I mean come on, that was destined to end in tears wasn't it ? It was these ridiculous ideas that were the last gasp effort to sustain the ponzi scheme.

inspector_monkfish

13th Jun 79 - 14.00
15th Nov 79 - 17.00 :eek:
3rd July 80 - 16.00
25th Nov 80 - 14.00
11th Mar 81 - 12.00
25th Aug 81 - 12.69
15th Sep 81 - 14.00
12th Oct 81 - 15.00
28th Oct 81 - 15.13
6th Nov 81 - 15.06
9th Nov 81 - 14.63
25th Nov 81 - 14.56
4th Dec 81 - 14.38
18th Jan 82 - 14.31
19th Jan 82 - 14.25
20th Jan 82 - 14.13
21st Jan 82 - 14.00


looks like some blind panic going on around end of 1981 and start of 1982, with loads of silly little hikes and cuts !!
even 4 consecutive cuts in 4 days in Jan 82 !!

and you thought we had muppets in charge nowadays !!! :rotfl:

Generali

inspector_monkfish wrote: »

13th Jun 79 14.00
15th Nov 79 17.00 :eek:
3rd July 80 16.00
25th Nov 80 14.00
11th Mar 81 12.00
25th Aug 81 12.69
15th Sep 81 14.00
12th Oct 81 15.00
28th Oct 81 15.13
6th Nov 81 15.06
9th Nov 81 14.63
25th Nov 81 14.56
4th Dec 81 14.38
18th Jan 82 14.31
19th Jan 82 14.25
20th Jan 82 14.13
21st Jan 82 14.00


looks like some blind panic going on around end of 1981 and start of 1982, with loads of silly little hikes and cuts !!
even 4 consecutive cuts in 4 days in Jan 82 !!

and you think we have muppets now !!!

Things were different then. The IMF had been called in 5 years earlier so were possibly still callng the shots to some extent. Also, some of the changes would probably have been technical and related to the operation of the repo market - I think that now the base rate and the BoE repo rate can be different and that wasn't the case then. I'm not sure though.