Experiences of the last housing market crash?

roswell

Found this on the national statistics website figures in 1000`s of reposessions warrents issued and executed.

England & Wales Thousands

Warrants Warrants
executed issued

1984 23 50
1985 27 53
1986 31 59
1987 30 66
1988 28 70
1989 30 65
1990 42 103
1991 61 134
1992 62 124
1993 51 126
1994 50 116
1995 51 117
1996 49 111
1997 50 116
1998 60 130
1999 71 137

Data is on link http://www.statistics.gov.uk/STATBASE/Expodata/Spreadsheets/D3636.xls

Alan_M_2

prudryden wrote:

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?

The government statistics are based on sales only, you can actually find full statistics covering the late 80's an early 90's that show no drop in values whatsoever.

The following are excluded from the statistics:-

Compulsory Repossessions
Voluntary repossessions
sales at auction
Anyone who rode out the drop and chose not to sell until price recovered.

Only actual sale prices are included, so a house bought for £80K in 1987, valued at £45K in 1992 but sold in 1997 for £200K never lost any money statistically, because the record of any value drop wasn't recorded.

prudryden

I can see the comparison - but I still can't see the "crash."

I can see that in 1989 prices went up 21%, then fell 1.3% in 1990 and fell for the next 3 years. The total for the 4 years being 9%.

At the same time, repossesions increased substantially percentage wise for a couple of those down years then leveled off. So it looks as though the one's who purchased in 1989 near the top of the market and took out 90% or more loan to value were hit.
I wonder what percentage of those losers were speculators - taking out that much loan to value is always speculative.

It looks as though the down turn in the market affected less than 10% of the housing stock.

What does the note at the end of your figures mean "rented and mortgaged"?

Many thanks for the info - still trying to figure it out.

Alan - didn't see your post until after sending this. This was in response to roswell

wibble68_2

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.

I've said this before and allow me to apologise for saying it again.

The home you live in can't be classed as an investment.

Jon211

prudryden wrote:

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?

You need to take a look at inflation as well.

From your link:
Year 1989 House Price £54,846
Year 1995 House Price £65,644

However, rather than a 19.7% rise, if we take inflation into account using the data here http://www.statistics.gov.uk/StatBase/tsdataset.asp?vlnk=7172&More=N&All=Y
we see that we actually had 31% inflation during this time, so prices fell by 11% in real terms over this 6 year period.

fivemice

wibble - Why is that?

bootman

I cannot remember the dates now but bought for £58 at the age of 17. I worked for a bank and manager was happy to blagg my income, he thought he was helping me get on the ladder. The rates went up to the 15%. I ended up having to hand back the keys.

I was marched to the Banks local solicitors to see what they had to say about it. They had no experience of voluntary repossession as it had only just started to happen. My job was at risk.

The building society sold the house for 30k!!! I heard no more until SEVEN years later. Then my world fell apart. I had just had a baby, The letter was worded as if the house had sold yesterday and I now owed the difference of something like 26k.

After a desperate year of trying to get the matter resolved they settled for a much smaller sum in the end. It was the worst year of my life, they were calling my work and everything to harass me.

Now I have almost paid off my mortgage but we are having to look to relocate nearer to DH work, Leeds way. The houses are so expensive in any nice villages around Leeds and Huddersfield. I have looked at several on the ourpropery website to see what they sold for over the past few years as to what they are asking now. There are some massive price hikes on there.

wibble68_2

fivemice wrote:

wibble - Why is that?

As far as I'm concerned an investment is something that you will eventually cash in.

Fair enough you could downsize or release some equity but for many people downsizing by only 30% would mean they end up living in a smaller house, or in a not so nice area than they've done all their lives.

Even at today's house price / wages ratio of 5 - 6 times, that would mean releasing somewhere around 2 x salary maximum. Which is not much to show for your investment.

I would agree that owning your own home has a lot of advantages. Some people will even permanently mortgage themselves up to the hilt to keep buying a bigger house so when they come to downsize it may almost be worth it.

Yes buying a house does give you options, but as for it being an investment, I would say no.

People are now even saying that their home is their pension. OMG!!!!!!!!!!