Experiences of the last housing market crash?

Spendless

Hi PauperPrincess -both me and DH have individually experienced negative equity before we met. These are our 2 stories

DH moved away with his job. It was late 80s, house prices were thru the roof and interest rates high. He couldn't afford to buy by himself, and it was suggested to him he bought with a bloke he didn't know who had also moved with same company (:rolleyes: is my view on this;) ). The other bloke did a moonlight flit one day. The mortgage was the same as DH net income, the house was re-possessed by which time the prices had crashed. DH moved back in with his parents and had to pay so much back until eventually the bs agreed to a !!!!!! (full and final settlement)

I bought a 2bed MTH in the mid 90s, I was late 20s still living with parents, single and wanted and could afford my own place. Within a year of buying the place was in neg equity. but very slowly at first. To start off with it didn't bother me. I wasn't moving, then I met DH by now he had bought another flat by himself in a different county. He moved back to Yorkshire to be with me, we sold his flat for a small profit (about £4K) We got married and had our son and my house was far too small for us. By now the house was worth about £10K less than I'd paid. Eventually we rented my place and bought a bigger place. This was a year before the boom happened here, so we got this place cheap, and when the tenants moved out of mine we sold at a profit.

You also asked what people did if they needed to move, some like me stuck it out. Others I know they worked and put money aside each month to pay off the negative equity.

Ian_W

Alan_M wrote:

A larger bubble formed in the Southern part of the country and the home counties which slowly permeated around the rest of country, so that kind of ties in with your timescales.

The bubble in the south was more severe, in both it's peak and it's trough.

This is where the theory that London is the indication on what's going to happen around the rest of the country comes from.

If so Alan it's interesting that it took about 3 years longer for our bubble to burst than yours. By which time yours was re-inflating!! :rotfl:

I do think it illustrates that those who think they'll wake up one morning to find every house in the country has fallen 30% are being mighty naive. If, or rather when, there is a crash some parts will suffer big losses others relatively small ones and my guess is the most volatile on the way up are likely to be the same on the way down.

cwcw

Alan_M wrote:

A larger bubble formed in the Southern part of the country and the home counties which slowly permeated around the rest of country, so that kind of ties in with your timescales.

The bubble in the south was more severe, in both it's peak and it's trough.

This is where the theory that London is the indication on what's going to happen around the rest of the country comes from.

If London does set the trend, and I believe it does, then the "north" has some fairly high rises to look forward to first, since London is still enjoy massive rises in prices and has yet to start a downturn. Any crash in this part of the country could be several years behind a crash in London, which has yet to materialise anyway.

Alan_M_2

Ian_W wrote:

If so Alan it's interesting that it took about 3 years longer for our bubble to burst than yours. By which time yours was re-inflating!! :rotfl:

I do think it illustrates that those who think they'll wake up one morning to find every house in the country has fallen 30% are being mighty naive. If, or rather when, there is a crash some parts will suffer big losses others relatively small ones and my guess is the most volatile on the way up are likely to be the same on the way down.

Absolutely agree, the idea that any correction is countrywide is misinformed, in the sameway that any increase is countrywide.

Alan_M_2

cwcw wrote:

If London does set the trend, and I believe it does, then the "north" has some fairly high rises to look forward to first, since London is still enjoy massive rises in prices and has yet to start a downturn. Any crash in this part of the country could be several years behind a crash in London, which has yet to materialise anyway.

That's not an unreasonable theory, although I think the figures (statistics) produced by the London area are more disproportionate now than they ever have been.

The prices of some of the properties in Westminster are eye watering, and whilst London my be an indicator of increases or decreases I think the amounts (percentages) of both in the London area can be generally ignored as London is really itself a macro economy that bears little relation to the rest of the UK (other than underlying trends).

Snow_Dog

meanmachine wrote:

If' I'm right, it wasn't so much interest rates, but a combination of rates, MIRAS ending annd MASSIVE HPI in that year - something like 30%.

Look at the Nationwide BS stats and the average property went from 50K at the start of the year to 60K by the end.

Thankfully, such madness has been overcome in these "sophisticated" times.

Now remind me again what the HPI was in N Ireland last year? 44% was it?

Very sophisticated.

And there's me thinking MIRAS ended in 2000, not 1988, HPC party line again?
If you throw enough stats around it might impress.

wisbech_lad

I did a bit of work for the bad loan unit of a major high street bank in 1992/3. They had been generous with their lending (95%) and it hurt, badly. People were sending in their keys, rather than continue pay the mortgage.

Most was due to redundancies though - if people kept their jobs they were normally OK

Dan29

Snow_Dog wrote:

And there's me thinking MIRAS ended in 2000, not 1988, HPC party line again?
If you throw enough stats around it might impress.

Double MIRAS ended in '88.

lynzpower

cwcw wrote:

If London does set the trend, and I believe it does, then the "north" has some fairly high rises to look forward to first, since London is still enjoy massive rises in prices and has yet to start a downturn. Any crash in this part of the country could be several years behind a crash in London, which has yet to materialise anyway.

Nice use of the word "enjoy(ing)" there.

I would say the only people really loving it ae estate agents.

FTBs on a lower than 50k income I suspect dont enjoy seeing prices rise week on week

BlondeHeadOn

I remember my mortgage payments (100% interest only) rocketing up to nearly £500 per month on a £39,500 mortgage - :eek: This was in the later 1980's / early 1990's. I also remember 3 of my neighbours losing their jobs at around that time, and two of them being re-possessed - in fact my next door neighbour just took his keys back to his building society and said "have my flat, I can't afford it any more!" Bad times....

I was lucky in that I had changed jobs for a much better paid and secure position just after taking out my mortgage, and so I could ride out the crash, negative equity and high interest rates. I wouldn't want to have to go through that sort of housing crash again though - very depressing.

I think the worst thing was how most people felt so trapped by the negative equity -they couldn't move on or even just cut their losses and sell up, as they would still owe so much money. Frightening thought now, when people generally already owe so much money on credit before the mortage is even taken into account.

Made me much mor cautious in the housign market, I cam tell you....