House Price Crash Discussion Thread

MissMoneypenny

PasturesNew wrote: »

This is the bit many don't get. It's not like a fairground where it rains for a day or two, then the sun comes out and everybody rushes in to try the rides out.

Once the confidence has gone, it takes a few years for people to venture back into thinking buying a house is a good idea.

Some people still have that confidence. On the following thread, people in debt bought another house to do up (on credit cards) and are now trying to sell that to clear most of their debts.
http://forums.moneysavingexpert.com/showthread.html?t=827099

carolt

Wow, scary.

SingleSue

Ok, first post but have been reading through the threads for a while.

We bought our house at completely the wrong time in 1990 but as the market had already fallen a fair bit (the previous owner lost 20K) we thought we had got it just at the right time.

How wrong we were!

I was on a decent salary (it would still be classed as decent in this area now!) but hubby was on a pretty poor salary but it didn't worry us, we could sustain extra interest rises (rates were around the 13% mark then) as the mortgage payment was a drop in the ocean compared to my monthly salary.

Then circumstances hit.... I got pregnant (we were told we were unable to have children).

Now the real problem hit, we were in a one bedroom house (as 95% mortgage holders we had not been able to get lending on anything other than a property less than 5 years old - we could have purchased a 2 bedroom for a similar price) and really needed to move to a bigger property.

Ahhh but remember we had looked at the market wrongly and hadn't bought at the lowest level, by the time we realised all of this, our property was already being valued at over 10k less than when we purchased and was definately into negative equity with an endowment mortgage.

Now the real crunch time... I had the baby, spoke to my employers and guess what? Yep in those dark days of the early 90's there was no such thing (or very few anyway) as job share, long maternity rights etc and my company only wanted me back if I could work an extra 3 hours overtime per day unpaid....plus get back to work just 6 weeks after the baby was born which was an impossibilty due to a rather horrendous delivery.

Over the next few months, we tried everything possible to hold onto the house, I took on 2 part time jobs (when hubby was able to cover childcare) to try to cover the shortfall from my loss of earnings even though the doctors were screaming at me to stop, and stop I eventually had to do when I developed signs of kidney failure and also developed pnuemonia in the same week.

Then the proverbial really hit the fan, other half was only earning enough to pay the mortgage with nothing left over for food, utilities etc etc and after a series of meetings with the Halifax (who I have to say were really really good and tried everything for us) it was decided that nothing could be done for us... recovery arrangements wouldn't work because we needed a bigger property (there was not even enough room to put a full size cot in the bedroom).

So then onto court, repossession, the lot.

I now live in a housing association house and have said since that debacle, that I would never ever get a mortgage again but I have watched the property/financial market like an obsession ever since.

The signs were becoming clear to me last year that we were heading for a major slowdown, even recession and blooming soon too. Repo notices up, bankruptcy/insolvency notices up, almost like a carbon copy of the 90's but without the extremely high interest rates which caused the bubble to burst last time.

As I said, I live in housing association rental property so I have no vested interest in the market, well apart from having a 3rd share in my parents home when they eventually pass away but I don't count that as you never know if they may need that to fund any care home that may be needed but the signs are increasingly worrying.

Salaries in this area have not moved much in the last decade or so, in fact you could get a job in the 90's on the same salary on offer now but everything else has gone up like a rocket.... going to the local supermarket is now extremely depressing, foods which were affordable a year ago is now out of my range, more of my money is going on diesel, gas and electric (a rise of £4 a week on gas even though usage is down in the last year alone), so even those of us without oodles of credit to cover, have felt the squeeze, in real terms, I am so much worse off than I was this time last year.

It took us many many years to recover from the last crash and that was with really quite a modest loss compared to what some could lose this time around but the ramifications people suffer from while trying to hang on in there (missed bills to try to pay mortgage etc) go on for years .... thank god, this time I will not be in the same situation, credit had not been available due to the repo and even when it did become available, we decided against it (had got used to putting money by to buy in cash only when we were unable to get credit) but I really do feel for those who do get caught..it only takes one circumstance to change for the worse for it to all come crashing down.


Sorry for rambling along for so long.....

mystic_trev

What a very sad story, but thaks for sharing it with us. Many (I fear) are about to start having the same problems you did in the early 90's.

Oh - and welcome to MSE

m00m00

A fantastic post singlesue and a timely reminder that there's more to life than house prices when it comes down to it.

PasturesNew

There are a few lessons from the past in SingleSue's posting, which are important. Seeing things the way they were back then gives an inkling of how they might be now. Of course all those top up benefits available today weren't available then for low earners, and easy credit didn't exist. So there was no having a credit card and paying it off with WTC etc.

I note also that SingleSue is noticing that salaries haven't increased for 10 years. For many people this is the case. Yet here we repeatedly see people expecting their salaries to rise over time. It doesn't always happen.

Thanks for taking the time to post with your real life experiences SingleSue.

fc123

We also bought end 1989 but house needed total renovation. Every pound spent on her vanished in neg equity and we sold for same price in 1996 after spending around £15k on her plus killing ourselves to keep up with the mortgage.
Fortunately, our income rose through this time, and we managed but with a toddler and thngs like having no kitchen for a year, no heating for 3 yrs bla bla bla, it was tough.
We were extremely fortunate that we didn't have any illness or tragedies because we lived hand to mouth continually.

I am absolutely praying that a similar recession and all the pain that goes with it won't happen again.
But I have a bad feeling...just anecdotal from businesses around me, we are all down at least 25%...which is our drawings.

We had friends with the 6 months salaries saved and redundancy monies too, but couldn't find work to keep their home...in the end the cash ran out.
Thanks for the post singlesue...welcome

fc123

PasturesNew wrote: »

There are a few lessons from the past in SingleSue's posting, which are important. Seeing things the way they were back then gives an inkling of how they might be now. Of course all those top up benefits available today weren't available then for low earners, and easy credit didn't exist. So there was no having a credit card and paying it off with WTC etc.

I note also that SingleSue is noticing that salaries haven't increased for 10 years. For many people this is the case. Yet here we repeatedly see people expecting their salaries to rise over time. It doesn't always happen.

Thanks for taking the time to post with your real life experiences SingleSue.

Didn't some people get mortgage interest paid straight away if they lost their jobs? I can't remember exactly. This time, one doesn't get anything for 9 months or has that rule changed too?

MissMoneypenny

fc123 wrote: »

This time, one doesn't get anything for 9 months or has that rule changed too?

From Shelter's site:-

Income support mortgage interest

http://england.shelter.org.uk/advice/advice-4176.cfm

jamescredmond

a quality post by singlesue, for sure.

and pretty humbling for me when I look at some of my other posts on this sub-board.