Experiences of the last housing market crash?

Poppycat

We bought our house in Nov 1989 in North Yorkshire on the coast (we are still here) 17 years later. What I notice is that although the house didnt devalue by much when we purchased a 2 bedroom mid terraced for 37k, it didnt go up in value for many years, in fact according to land registry in 2001 they were only just selling at 41k, now they are going over last 2-3 years at over 105k, ours recently sold for 112,500K highest price on the street, even was being sold for 111k, It is well resonably presented.

What I do recall of the late 80's and 90's is that interest rates were very high think it was 16% at one time, we really struggled, what with that and just raising a family, but we also had a deferred mortgage which was also a low start mortgage so they bumped the payment up after a few years.

I remember in mid to late 80's house prices rocketed, doubled in a short space of time, although we have it now interest rates are low but not as low as they were 6 months ago

Kez100

We bought our first home for 52.5k in 1991. We thought we had done well and hit the bottom of the market as the house had fallen from somewhere in the 60's.

We were wrong. It carried on falling and when we tried to sell in 1994 the house was worth 48k. We consider ourselves lucky that we lost so little. We decided to save ourselves out of trouble and would eat on 25 pounds a week. We sacrificed a holiday and soon managed to pay off the difference and move.

This is where, without realising it, we made our best ever financial decision. By now, in 1994, nothing was moving. Our little first time buy was well looked after and we managed to find a vicar who wanted to buy to let as his own home came with his job. Having saved enough to get out of our (I agree pretty minimal negative equity) and saved to afford fees and stamp duty we accepted his offer of 48k and set out to move upmarket.

The market was saturated with repossessed properties and very very few buyers. Our limit was 95k but we gave ourselves a budget of 75k. We looked and looked at so many but eventually fell on this one and offered 75k. It was on the market for 120k! It was a second home, inherited, and causing the owner a headache as she wanted to sell and it had been for sale for so long. She accepted and the rest, as they say, is history.....

The surveyor valued it at 90k which, I think in the terrible market, was fairer than the 120k. He still agreed we had bagged a bargain at 75k.

Our home, with sea view and a very large flat garden with a potential for planning, has experienced amazing increases in value. It is now worth, without planning, in excess of 380k (although we have spent approximately 30k over the years on improvements). Of course none of this we could have ever known in those dark nights going to bed early to save on power and eating cheap, home made vegetable curries and tomato pastas! Also, to some extent, it is irrelevant as we need to live here, so it's not actually worth anything other than peace of mind that we are on the ladder.

We experienced the high interest rates, including the overnight hike to 15% which never actually made it through to a mortgage rise. Since they dropped we have kept our payments high and whittled the mortgage borrowings down as far as possible. We will continue to do so as our naff endowment needs to be accounted for and we, also, do not wish to be paying anymore in interest than necessary if the rates ever rise again as they did in the 80's.

Ad

I was still at school at the time but remember it well. My Father a Carpenter by trade was in the later stages of completing a self build detached house.

He was meant to sell our home a bungalow and move into the house once completed. Unfortunately we never made the move and then the housing market started to crash.

He lost 35K when it finally sold. He did eventually sell the bungalow in 1997 but it was on the market for nearly two years. The whole situation was financially crippling for him and the stress made him ill.

From personnel memory it was a very bleak time in our lives. It’s hard to believe as a country we find ourselves once again at the brink.

This Labour government are the worst in my lifetime.


I also know a lady whose daughter worked for one of the high street buildings societies at the time. Everyday she had to deal with people handing back their keys and on many occasions they were in tears begging to keep their homes.

She eventually left due to the toll it took on her health and this was the case for other staff too.

wymondham

we sold our first house (1 bedroom), but had to pay £8k to get out of negative equity, still wasnt all bad as 2nd house was a 3 bedroomed semi with garage for less than we sold our 1 bedroom (repo)

nozzy

Last time it happened ftb's couldn't get on the housing ladder.I said to myself if the ladder's too high for ftb's, then the ladder must fall.And sure enough it did.
I predict the same will happen again - starting late this year.The present situation is unsustainable.The banks are about to win again.
If you intend to buy, my advice is don't - bide your time you will save £000's.I have sold my house.Last time, I was left with negative equity and nearly went bankrupt.
This time I'm ready for 'em and I'll swoop when the market is at its lowest.
I believe this time's house crash will be more spectacular than the last and the usual cries of 'who would have thought it' will resound across the land.

wlfc1

Sorry but all the circumnstnces were definately different in the late 80s/early 90s. but either way, you're buying a home and over the longer term its a a fantastic investment.

roswell

wlfc1 wrote:

you're buying a home and over the longer term its a a fantastic investment.

Thats assuming you dont loose the property and owe the bank a lot of money.

BobProperty

wlfc1 wrote:

Sorry but all the circumnstnces were definately different in the late 80s/early 90s. but either way, you're buying a home and over the longer term its a a fantastic investment.

Care to list which ones then, please?

prudryden

Just looking through some charts on house prices since the 1930's. I can't find this crash - enlighten me someone.
http://www.communities.gov.uk/index.asp?id=1156110

Look at the first table, what am I missing?

roswell

whats the sold price of a reposession? its not sold so its not on the chart.

see debate on http://forums.moneysavingexpert.com/showthread.html?t=314686&page=5&highlight=house+price+crash