Not a good time to buy

StevieJ

Procrastinator333 wrote: »

I have been googling 1980 crash, 80's crash etc etc and there is !!!!!! all on it - not saying you are making it up lol, just can't find much!

Wiped out half of UK industry some would say deliberately :eek: 1983 the first ever manufacturing deficit. It was lucky we had the newly minted (under Labour ) oil industry.

http://www.bized.co.uk/dataserv/chron/kf80.htm

http://www.guardian.co.uk/business/2004/may/09/past.women

phil_b_2

I agree it's not a good time to buy. It's also not a bad time to buy. Now is just a time... to buy.... if you want to.

Rochdale_Pioneers

Procrastinator333 wrote: »

I have been googling 1980 crash, 80's crash etc etc and there is !!!!!! all on it - not saying you are making it up lol, just can't find much!

Two recessions bookended the 80s. The economy was seeing some fragine recovery at the end of the 70s. Thatcher made some decisions which created a deep recession - monetarism became the prevailing dogma in economic policy, the first big wave of industrial vandalism as large parts of industry were closed, and as StevieJ has mentioned some crazy tax decisions - cuts in Income tax at the top end, big increases in VAT that hit the bottom end harder.

The effect was mass unemployment concentrated heavily in former industrial areas, and large-scale civil unrest. The unrest spread to the Cabinet, with Thatcher's economics advisor Alan Walters warining that the obsession with Monetarism was prolonging and deepening the recession.

We then saw a return to growth and a city-fuelled bubble post deregulation in 1986. Those people still in work (not the 3m who were out of work after the recession - the Tories are so hated across the North/Wales/Scotland because the closest they got to economic recovery was being told to get on their bike, the business parks we now see in ex steel and coal towns was done by Major) had a ball. Lawson proclaimed an economic miracle, the economy overheated and imploded. Major took Britain into the ERM at a bonkers exchange rate and we eventually had to leave when it was costing billions a day to try and keep us at the specified rate of exchange.

A deep recession in 91/92 followed by the start of the growth we saw for the balk half of the 90s and most of the noughties. If you want to compare and contrast, the previous recession saw 3m+ unemployment (vs 2.5m now), 10%+ interest rates caused by high inflation (vs 0.5% now and low inflation), and much higher rates of both home reposessions and bankruptsies as now. The government's attitude towards it was to tell the unemployed "yes it hurt, yes it worked", and Lamont to famously sing in the bath on Black Wednesday declaring "non, je ne regret rien"

Noone is saying Labour got everything right - that would be lunacy. But to pretend that 1997 was year zero as many frothers attempt, pretending that Britain has never had it so bad is also lunacy. Its been a tough recession. But for most people not as tough as either 81 or 91. And the blame apparently this time is on Brown for deregulating the city. The same people don't blame the 91 recession of Thatcher for deregulating the city despite the cause and effect being so very similar - right down to an arrogant smug chancellor believeing his own hype of an economic miracle in the forms of Lawson and Brown.

b0rker

Procrastinator333 wrote: »

Not a good time to buy

With a username like Procrastinator333 there will never be a good time for you to buy.

Good news for all those BTL landloards.

Procrastinator333

@ Borker - Been posting my bearish thoughts for a couple days now, and I wondered how long it would be until someone said that! lol.

At the moment I can procrastinate - newly married couple, keen to have the first couple of years to ourselves before kids. It is no issue for us to rent, from a lifestyle perspective, probably better as we have not yet comlpetely settled in to our respective careers. So not sure where we will end up wanting to live in a couple of years.

When kids do arrive, any desire I have to procrastinate further will no doubt firmly be put in to place lol.

We are not renting from a btl, it is a forced renter, they couldn't sell at the price they thought it was worth, so had to rent it out.

@ chucky, rates for the ftb are pretty high, they could also go down and then you would find youself stuck on the fix. Swings and roundabouts.

@ Stevie J, thanks for those links, interesting reading, doesn't really sound like a happy time either.

@ Rochdale, thanks for that too.

As inflation was so rampant then, had a look at inflation adjusted house prices. A house in 79 was worth the same in 96 :eek: 0% inflation adjusted hpi over 17 years.

No financial benefit to owning during that period. Though get on / off at the wrong / right point and you do fine or badly depending.

Interesting stuff. I take you point. It has happened before and will happen again, it is probably not the worst it has ever been. I'm not going to sit on my hands forever - the DW won't let me lol.

But this doesn't change my view that a potential ftb currently renting has nothing to lose by waiting 6-12 months, and if things do go belly up they have a lot to gain. It is a no loss gamble to me.

carolt

Well said.

HAMISH_MCTAVISH

Procrastinator333 wrote: »

But this doesn't change my view that a potential ftb currently renting has nothing to lose by waiting 6-12 months, and if things do go belly up they have a lot to gain. It is a no loss gamble to me.

And no doubt you thought the same thing 10 months ago......

Before house prices rose by almost 10%.;)

Which turned into a pretty big loss for your gamble.

Procrastinator333

Fair point, would never have thought they would turn around like that. But by that point I was already up (for want of a better word) 25% (or whatever the number) from not buying in 07. As shown in my other thread I'm still up by quite a bit. So :beer: to me.

If I'm wrong about the next 6-12 months I'm wrong. I'm not syaing rises are impossible, simply that I view them as unlikely. Hence I'm comfortable with my position.

HAMISH_MCTAVISH

Procrastinator333 wrote: »

If I'm wrong about the next 6-12 months I'm wrong. I'm not syaing rises are impossible, simply that I view them as unlikely. Hence I'm comfortable with my position.

Fair enough.

After all, the worst thing that could happen (from your perspective) is that they repeat last years performance, and therefore return to peak by year end...... As they have already done in my own market. (although I think 2011 is more likely nationally, BTW)

In which case all you have lost is 30,000 or so in rent, and whatever additional costs in rates once they start rising, and/or worse margins above base. Perhaps 50K or so.

It would be an expensive lesson to learn, but you're still young.;)

Procrastinator333

Go re-read my other post. Yes I have spent money on rent instead of interest.

But I'm sitting on a non crytalised profit at the moment. So £30k down is nonsense.